George Olmstead, senior director of Cushman & Wakefield’s Healthcare Practice Group George Olmstead, senior director of Cushman & Wakefield’s Healthcare Practice Group

ATLANTA—How great is the demand for medical office buildings? The statistics suggest great and growing.

The US Census Bureau estimates that the 65-plus population will nearly double between 2015 and 2055 to more than 92 million and by then will comprise nearly 23% of the country’s total population. Atlanta has seen a 32.1% increase in the population of the 65-plus demographic between 2011 and 2016, which is the highest growth among the measured markets in the report.

GlobeSt.com caught up with George Olmstead, senior director of Cushman & Wakefield’s Healthcare Practice Group, to get his thoughts on this market in our exclusive interview.

GlobeSt.com: What macro trends are driving Atlanta’s MOB market?

Olmstead: As the population requiring healthcare services rises, we expect medical office buildings to continue to perform well. In 2016, the number of people in the US age 65 and older totaled 49 million, up from 35 million in 2000, and the insured coverage rate reached 91%, up from 84% in 2010.

Medical office inventory is already strained nationwide. That has led some outpatient healthcare providers to seek out development partners for new MOBs, but also alternative spaces such as retail or shopping centers which would allow the providers access to the patients in their neighborhood settings and oftentimes more cost effectively than new construction.

GlobeSt.com: How did the MOB sector in Atlanta perform in 2017?

Olmstead: In the third quarter, vacancy decreased from 14% in the third quarter of 2016 to 12.5% in the third quarter of 2017. That’s below the city’s historical average.

However, this rate should slow or stabilize during the next 24 months as newly delivered MOBs are absorbed. As of 3Q 2017, the Cushman & Wakefield Healthcare Practice Group is tracking 290,000 square feet of under-construction MOB space, while over 310,000 square feet has already delivered this year metro-wide.

Is Atlanta set up for a medical office boom? Get one take. And if you are looking for this type of office space in the region, you might not like this news.