In the first quarter of 2016, there were 163 transactions of medical office buildings totaling more than $1.8 billion in volume, according to estimates by CBRE, the nationās largest real estate services provider, in its latest āNational Healthcare Real Estate Investor Update.ā
By far the largest transaction occurred last January, when a joint venture between Chicago-based Heitman Capital and Denver-based NexCare Group paid $199 million to acquire the 227,628-sf First Hill Medical Pavilion in Seattle.
That facility, which last year underwent an extensive renovation and 63,000-sf addition, is positioned adjacent to the Swedish Medical Center campus thatās part of Providence Health & Services healthcare system, which leases 65% of First Hill. (The architect of the reno and expansion was CollinsWoerman; the GC was Lease Crutcher Lewis.)
CBRE observes that the healthcare section continues to be āone of the strongest job generators in the American economy.ā Quoting Bureau of Labor Statistics data, CBRE notes that between April 2015 and April 2016, healthcare produced 482,000 jobs, orĀ roughly 18% of the 2.7 million nonfarm jobs formed in the U.S. during that period.
Last year, the number of uninsured Americans stood at 9.1% of the total population, the first time in the countryās history that number had fallen below 10%. Last yearās future compares to 16% in 2010, the year the Affordable Care Act was enacted.
CBRE also points to a recent Accenture study of six years of hospital margin data and patient satisfaction scores. Top-ranking hospitals achieved markets that, on average, were 50% higher than those with average scores. The top hospitalsā revenue growth also outpaced their operating expenses.
The healthcare sector could become even more attractive to certainĀ investors after new regulations went into effect in April that mandate greater transparency and disclosure for non-traded REITs in such areas as per-share valuation and dividend distribution.
The new regs prohibit the public offering of securities of a REIT or direct participation program unless the sponsor agrees to annually disclose (at a minimum) the per-share value of each security.
āInvestors of non-traded healthcare REITs now stand to benefit from these regulations aimed at fundamentally revising this investment product that has long been characterized with nontransparent share prices and high commissions,ā CBRE writes. āHealthcare real estate is still very much in demand and will continue to attract broker-dealers to offer the non-traded REIT products. The existing sponsors in the market are expected to continue to thrive while making it more difficult for new sponsors to enter the space.ā
Ā
Related Stories
Healthcare Facilities | Feb 21, 2023
Cleveland's GlickĀ CenterĀ hospitalĀ anchors neighborhood revitalization
The newly opened MetroHealthĀ GlickĀ CenterĀ in Cleveland, a replacement acute care hospital for MetroHealth, is the centerpiece of a neighborhood revitalization. The eleven-story structure is located within a āhospital-in-a-parkā setting that will provide a bucolic space to the community where public green space is lacking. It will connect patients, visitors, and staff to the emotional and physical benefits of nature.
Multifamily Housing | Feb 16, 2023
Coastal Construction Group establishes an attainable multifamily housing division
Coastal Construction Group, one of the largest privately held construction companies in the Southeast, has announced a new division within their multifamily sector that will focus on the need for attainable housing in South Florida.
Intelligent Lighting | Feb 13, 2023
Exploring intelligent lighting usage in healthcare, commercial facilities
SSR's Todd Herrmann, PE, LEEP AP, explains intelligent lighting's potential use cases in healthcare facilities and more.
Giants 400 | Feb 9, 2023
New Giants 400 download: Get the complete at-a-glance 2022 Giants 400 rankings in Excel
See how your architecture, engineering, or construction firm stacks up against the nation's AEC Giants.Ā For more than 45 years, the editors of Building Design+Construction have surveyed the largest AEC firms in the U.S./Canada to create the annual Giants 400 report. This year, a record 519 firms participated in the Giants 400 report. The final report includes 137 rankings across 25 building sectors and specialty categories. Ā Ā
Giants 400 | Feb 6, 2023
2022 Reconstruction Sector Giants: Top architecture, engineering, and construction firms in the U.S. building reconstruction and renovation sector
Gensler, Stantec, IPS, Alfa Tech, STO Building Group, and Turner Construction top BD+C's rankings of the nation's largest reconstruction sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Healthcare Facilities | Jan 31, 2023
How to solve humidity issues in hospitals and healthcare facilities
Humidity control is one of the top mechanical issues healthcare clients face. SSR's Lee Nordholm, PE, LEED AP, offers tips for handling humidity issues in hospitals and healthcare facilities.
Augmented Reality | Jan 27, 2023
Enhancing our M.O.O.D. through augmented reality therapy rooms
Perkins Eastmanās M.O.O.D. Space aims to make mental healthcare more accessibleāand mental health more achievable.
Hospital Design Trends | Jan 19, 2023
Maximizing access for everyone: A closer look at universal design in healthcare facilities
Maria Sanchez, Interior Designer at Gresham Smith, shares how universal design bolsters empathy and equity in healthcare facilities.
Fire and Life Safety | Jan 9, 2023
Why lithium-ion batteries pose fire safety concerns for buildings
Lithium-ion batteries have become the dominant technology in phones, laptops, scooters, electric bikes, electric vehicles, and large-scale battery energy storage facilities. Hereās what you need to know about the fire safety concerns they pose for building owners and occupants.
Healthcare Facilities | Dec 20, 2022
4 triage design innovations for shorter wait times
Perkins and Will shares a nurse's insights on triage design, and how to help emergency departments make the most of their resources.