The recent Connect Media conference on Orange County commercial real estate (CRE) highlighted the uncertainty in the market. However, at the following day’s Connect Healthcare Real Estate 2023 event, industry leaders expressed a more optimistic outlook for healthcare real estate compared to other markets like office.
At VEA | Newport Beach Marriott on Thursday, experts gathered to discuss challenges facing healthcare real estate and how it can overcome them. The “Fireside Chat” between Murray Wolf of Healthcare Real Estate Insights and Jarrod Daddis of NexCore Group set the tone for discussions about when this challenging market will improve.
According to Daddis, who has never seen such a market in his career, there is no clear timeline for recovery but it may be around 2025. While COVID-19 is mostly behind us now, its impact continues as health systems and practices struggle with rising costs and labor shortages while catering to an aging population.
A JLL survey found that Baby Boomers are more likely than other generations to seek medical care with over 70% receiving primary/preventative care in April this year. This trend was discussed by panelists including Troy Freeman from Banner Health; Garth Hogan from Newmark; Dan Klein from Physicians Realty Trust; James A Schmid from Anchor Health Properties moderated by Peter Becronis of ShareMD Asset Management during “State of Market & Future of Healthcare Real Estate” panel discussion.
The second panel focused on financing options for healthcare real estate projects moderated by Emma R Keyser Polsinelli along with Gary Bechtel Red Oak Capital Holdings Michael Borchetta Harrison Street Katelyn Girod Capital One Healthcare discussing how uncertain times have made traditional sources step back leading private equity firms looking into medical investments instead creating winners & losers among REITs post-pandemic reversal according Toby Scrivner Northmarq Travis Ives Cushman Wakefield David Lari Cox Castle Tim Olivos Ventas Inc.
The remaining panels covered topics such as healthcare real estate development, design & construction and the role of policy in addressing healthcare inequity. Overall, experts agreed that while deals are still being made, they take longer to close and teamwork is crucial for success. With capital availability and creativity being key factors in navigating this challenging market, there will be both winners and losers with private equity firms showing increased interest in medical investments. Despite some bumps along the way until 2024, most panelists expressed optimism about the future of healthcare real estate.
Image: The State of Market & Future of Healthcare Real Estate panel at Connect Media’s Orange County CRE conference (Source: Connect Media)
