**Industry Insights: Collin Hart Discusses Trends in Healthcare Real Estate at Connect Conference**
ERE Healthcare Real Estate Advisors CEO and Managing Partner, Collin Hart, is set to share his insights at Connect Healthcare Real Estate 2025, taking place October 14–15 at the Hyatt Regency in Irvine. Ahead of his fireside chat with Revista’s Stephen Lindsey, Hart offered a detailed look into the current state of the healthcare real estate market, highlighting key trends shaping investment, development, and deal structuring within the sector.
**Sale-Leasebacks Remain a Strong Play for Physician Groups**
ERE is known for its expertise in advising physician groups on sale-and-leaseback strategies. Despite current capital market challenges and elevated interest rates, Hart notes that demand remains strong for these transactions as a liquidity strategy during times of leadership transition, partnership shifts, or operational changes within practices.
“Physicians may lose full control of their practice due to consolidation or changing ownership dynamics. That often sparks the need to reevaluate their real estate investments,” Hart explained.
He emphasized the importance of internal factors like physician career timelines, partnership structures, and lease terms—rather than attempting to time the market. Investors typically look for long-term (10+ year) triple-net (NNN) leases with annual rent escalations of 2–3%, and tenants with sound financial performance and operational depth.
“These are not simple credit-rated tenant leases,” Hart said. “They’re nuanced deals with bold personalities and specific preferences. Creativity and open-minded negotiation are essential.”
**Ambulatory Surgical Facilities Leading Investor Appetite**
In terms of sector demand, Hart highlighted that ambulatory surgical centers (ASCs) and facilities focused on surgical specialties are attracting the highest levels of investor interest. The broader trend of healthcare delivery shifting to outpatient settings is behind this growing demand.
“ASCs tend to offer better patient outcomes at lower costs and serve as the profit centers for many practices,” Hart said. “Because they are expensive to build and relocate, they create built-in, long-term tenancy. That’s attractive to investors looking for stability.”
Looking ahead, Hart sees continued capital interest in these types of assets—particularly as debt costs are expected to ease over the next 12–18 months.
**Adaptive Reuse an Option—But With Caution**
Adaptive reuse of non-medical buildings, particularly office properties, is becoming more common due to high land and construction costs. Yet, Hart warns that the economics of such conversions must be carefully scrutinized.
“A building purchased for conversion should be priced like a shell, not based on its existing build-out, since the interior likely needs complete demolition and medical-specific improvements,” Hart said. Buildout costs can range from $175 to $250 per square foot for clinical uses—and well beyond that for ASCs.
He also noted that existing infrastructure such as electrical load, water capacity, fire safety, and structural design must be evaluated early. If deficiencies are too great, the cost of conversion could exceed that of a ground-up medical construction.
**Healthcare Real Estate: Resilient but Evolving**
Several macroeconomic and policy shifts are reshaping the healthcare real estate landscape, including changes in reimbursement, the rise of telehealth, and regulatory pressures.
“Telehealth reduces the need for large clinical spaces, raising the value of specialized, in-person care facilities like ASCs. At the same time, larger health organizations are well-positioned to navigate regulatory hurdles, putting pressure on smaller providers,” Hart said.
Despite challenges, Hart remains optimistic: “Everyone needs healthcare, and that equates to steady demand for care delivery spaces. When executed correctly, investments in healthcare real estate continue to be sound and compelling.”
As ERE continues to advise physician groups, corporate healthcare, and hospital systems, Hart says the firm remains excited to guide clients on optimizing real estate assets amid an increasingly dynamic investment environment.
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Capital, development, leasing, demographics—the driving forces of healthcare real estate will be front and center at Connect Healthcare Real Estate 2025. Industry leaders and innovators will gather to shape the future of medical office, FSEDs, ASCs, and hospital investment this October 14–15 in Irvine.
