After the Great Recession took its toll on most sectors of commercial real estate, even “recession-resistant” healthcare real estate, 2012 represented a comeback year for medical properties. Not only were MOB sales close to breaking an all-time record for volume, but development projects were on the upswing as well.
Now, it looks as if 2013 is going to be just as good, perhaps even a bit better, than 2012, according to experts in the field.
“The year is already off to a busy start,” says Philip J. “PJ” Camp, a principal with investment banking firm Hammond Hanlon Camp LLC in New York. “More and more investors continue to be interested in the space, and hospital systems are finally considered new development projects that are consistent with what they need to accomplish in the era of healthcare reform.”
Other healthcare real estate professionals note that the acquisitions market should remain strong, development of new healthcare facilities, especially those with hospitals and health systems as sponsors and tenants, will continue to pick up, and that vacancies should continue to drop, as they have in the past year or so.
Most of the people interviewed for this series of three stories are members of the Editorial Advisory Board of Healthcare Real Estate Insights (HREI).
Twenty members of the board gathered for the annual HREI meeting in late 2012 to discuss the state of the industry and the latest trends affecting the sector. While much of the discussion was “off the record” and not for publication, we did conduct a poll to gauge where the editorial board members foresee their business heading in 2013.
By an overwhelming majority, the board members at the meeting were optimistic about their organization’s prospects for the year ahead. Composing the editorial board are developers, sales brokers, investment bankers, investors, health system executives, and others who provide an array of healthcare real estate services and strategies.
In a straw poll, 12 of the 20 members said they expect their business to increase by more than 10 percent in 2013 as compared to 2012, which most said was a good year. Another five board members said that they expect their business to increase between 1 percent and 10 percent in 2013, meaning a full 85 percent foresee business increasing at least 1 percent in 2013.
Just two board members predicted that their business would decrease in 2013.
While the poll was unscientific and represented a small sampling of the firms and people involved in healthcare real estate, the members of the HREI™ board are a part of some of the leading firms in the sector and their responses, if you will, can be considered bellwethers of what is taking place.
In the next story, we’ll find out why a number of healthcare real estate professionals believe MOBs will remain a hot investment property type in 2013.
John Mugford is the Editor of Healthcare Real Estate Insights, the nation’s first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.