Healthcare Real Estate Investments

Healthcare real estate is one of the fastest growing and most specialized commercial sectors. Demand for medical office buildings (MOBs), freestanding medical facilities and ambulatory surgery centers continues to rise across the nation. This growth is driven by two factors: America’s aging population and the continued proliferation of integrated healthcare.

A healthcare real estate investment can yield excellent returns with relatively low volatility compared to other commercial properties. Healthcare REITs have shown the ability to maintain occupancy levels above 95%, while providing stable 2-3% rent growth. Moreover, the long lease lengths in which most tenants sign contracts make this real estate type an attractive opportunity for both landlords and investors.

Unlike other commercial property types, many healthcare spaces are required to undergo rigorous regulatory approval processes before being built. Prospective developers are required to prove sufficient demand for the space through a process known as “determination of need.” These regulations help prevent healthcare providers from overbuilding and inflating the cost of care.

In addition, medical office buildings located in retail spaces or shopping centers often garner additional foot traffic and visibility from patients who frequent these locations. In this way, healthcare real estate can serve as a valuable recruiting tool for physicians and a way to increase enterprise value.

For hospitals and health systems that currently own their clinical real estate, sale-leaseback transactions can be an effective capital solutions for optimizing resource deployment. HREA has deep relationships with all major investor groups that acquire healthcare real estate — including REITs, private equity, high net-worth individuals, pension fund advisors and others. healthcare real estate