Healthcare Real Estate: A Unique And Bullish Market
The future of healthcare real estate is bright with baby boomers aging, but industry leaders weighed in on what could change and why this segment is so unique from an operations standpoint.
“I’m easily bullish [on healthcare real estate]. 100%,” HCP Vice President of Leasing Tom Hulme said. “The market is smoking hot, and I’m absolutely bullish.” Hulme and other healthcare real estate leaders convened Monday at the 2017 BOMA International Conference & Expo to discuss the state of their sector and the unique nature of their arc of commercial real estate. LifePoint Health Senior Director of Real Estate Tammy Moore was equally bullish on the industry based on the sheer fact that there are so many baby boomers aging into the demographic likely in need of healthcare facilities. They were joined by Cambridge Holdings’ Ryan Doyle, who also was optimistic but cautioned ever-changing consumer demands could lead to a bearish climate.
Hospitals in tertiary markets have been closing in the years since the passing of the Affordable Care Act, but the panel was not ready to put the blame solely on the ACA. Hulme said his company did not see business impacted in the last seven to eight years from healthcare reform.
“I’ve read a report saying the United States is over-bedded, so you have to wonder if hospitals are closing because of that,” Moore said.
The panel also discussed the unique nature of healthcare real estate. Moderator and Healthcare Realty Trust Vice President Amy Byrd said medical office buildings have more specialized requirements and often have drastically more visitors than other commercial properties, leading owners or managers to approach operations and design in a different way — down to slight inclines in hallways and how that might affect a visitor.
While healthcare facilities might require more focus on detail, Byrd enjoys the challenges of this property type.
“I feel every day like I’ve contributed to someone’s well-being,” she said.