**ERE Healthcare’s Collin Hart Previews Trends in Healthcare Real Estate**
At the upcoming Connect Healthcare Real Estate 2025 conference—scheduled for October 14–15 at the Hyatt Regency Irvine—Collin Hart, CEO and Managing Partner of ERE Healthcare Real Estate Advisors, will share insights on the evolving landscape of healthcare real estate alongside Revista’s Stephen Lindsey. Ahead of the event, Hart offers his perspectives on sale-leaseback structures, investor demand, adaptive reuse, and the future of the sector. ERE specializes in advising physician groups on how to unlock value in their real estate through sales and leasebacks, often amid changes in practice dynamics.
**Sale-Leasebacks: Liquidity, Transition, and Timing**
When asked about the attractiveness of sale-leaseback transactions in the current capital markets, Hart emphasized that these deals remain a strong avenue for physicians to unlock liquidity without disrupting their operations. He explained that even during tight markets and periods of rising interest rates, demand has stayed steady.
“Sale and leaseback transactions provide an exit strategy for physicians to create liquidity within their partnership,” said Hart, noting that a shift in leadership or partnership structure is often what prompts a sale. “Although capital markets are tighter today, the motivation for physicians to sell remains strong, driven by consolidation and changes in practice ownership.”
Hart advised that rather than focusing strictly on market timing for valuation, physicians should consider factors they can control—such as their career timeline, partnership dynamics, and lease terms.
From an investor standpoint, Hart noted that the most compelling deals typically include long-term (10+ years), triple-net leases with 2–3% annual rent escalations. Investors also prefer strong operational performance, minimized reliance on a small set of providers, and financially stable tenants.
“These transactions can be complex and require creativity,” Hart added. “They often involve personalities and nuanced terms, so open-minded negotiation is key.”
**Where Investors Are Putting Their Capital**
According to Hart, investor demand is strongest for real estate associated with surgical specialties, particularly those that include an ambulatory surgery center (ASC) component.
“There’s a clear shift in care delivery away from hospitals and toward outpatient settings, which deliver better outcomes at lower costs,” Hart said. “ASCs in particular are a magnet for investor interest because they are expensive to build and difficult to replace, making tenants more stable and committed.”
With debt costs expected to decline over the next 12–18 months, Hart anticipates sustained or even increased demand for facilities that meet these criteria.
**Adaptive Reuse: The Economics Have to Work**
Hart shared that adaptive reuse—converting non-medical buildings like offices into healthcare facilities—can be appealing but comes with financial and logistical hurdles.
“To work, the acquisition cost of the property needs to be low enough to justify the high tenant improvement expenses,” he explained. “Existing interiors usually need to be demolished and replaced with costly medical-grade buildouts.” Clinical spaces can cost $175–$250 per square foot, while ASCs often exceed that, sometimes significantly.
He also cautioned on hidden infrastructure costs: limitations in water, electrical capacity, structural load, or fire safety systems can turn a seemingly cost-effective reuse into a more expensive endeavor than ground-up development.
“Conducting rigorous due diligence upfront is essential to avoid pitfalls that can derail the economics of adaptive reuse projects,” said Hart.
**Watching the Signals: Reimbursement, Telehealth, and Regulation**
Looking ahead, Hart is closely tracking several macro shifts that could meaningfully alter the healthcare real estate market, including reimbursement trends, telehealth adoption, and regulatory realignment.
“Declining reimbursements are pushing care to lower-cost outpatient environments like ASCs, and the rise of telehealth is reducing space needs in some clinical settings,” Hart observed. “At the same time, larger organizations are benefiting from regulatory structures that create challenges for smaller, independent groups.”
Despite the challenges, Hart remains optimistic about the investment case for healthcare real estate.
“Everyone needs healthcare, which translates into continued demand for physical space in which to deliver that care,” he said. “By staying focused on core fundamentals—location, lease structure, tenant strength—we believe investors can find great opportunities in this market.”
**Join the Conversation in Irvine**
From capital markets and leasing trends to adaptive reuse and specialty care, the Connect Healthcare Real Estate 2025 conference will bring together leaders shaping the future of medical offices, ASCs, urgent care centers, and hospital investment. The industry event takes place October 14–15 in Irvine.
For more information, visit: www.ConnectHealthcareCRE2025.com
