NEW YORK CITY-Thanks to a steady stream of healthcare consumers, the medical office sector has remained largely resilient in the face of economic headwinds. Indeed, people fall ill regardless of the health of the economy, and as a result, medical office has not seen the same sort of pullback that other industries have experienced.

Although a niche sector, according to the 2013 Emerging Trends in Real Estate report from Urban Land Institute and PricewaterhouseCooper, “medical office space presents compelling investment opportunities as the nation's health care industry balloons to take care of graying baby boomers.” In addition, despite whatever criticism people might have about President Obama's healthcare reform bill, it will ultimately result in health insurance for nearly 30 million additional Americans, which means more medical office space will be required. The ULI/PwC report notes that “the demand from doctors, clinics, labs and rehab providers is 'crazy to ignore.' Landlords should not have problems leasing space anywhere near hospital centers and medical complexes.”

What's most interesting about medical office is the sheer number of doctors who are banding together to join large networks that are currently competing with hospitals. In addition to the doctors on staff, there is also a sizeable administrative component—from insurance paperwork to payroll—that has increased in scope. This growth has allowed the healthcare industry to also compete directly with office and retail tenants for space. In fact, landlords in Westchester County or Long Island, where the office market is not quite as robust, are converting portions of their buildings to medical office.