As REITs pull back on acquisitions and focus more on refining their portfolios, private equity groups have more than taken up the slack. Total healthcare real estate transaction volume may have cooled ever so slightly - but not much - and so far this year, private investor buyers are making up 76% of that total.
This unassuming market is number 2 in terms of outpatient building deliveries and 4th for total deal volume. Even rent growth has been consistently surpassing the national average.
In general, health systems are choosing to build hospitals with lower bed counts. Technology, demand and reimbursement changes are all pressures that shift the focus to patient experience, advancing technology, and wellness and preventative medicine. This translates into more outpatient services, private rooms and fewer beds.
One of the largest projects in the Revista database is about to open on June 24th after more than a decade of careful planning and execution.
Houston is the number one metro in terms of square feet of hospital space under construction. As of the end of 2017, Houston had roughly 4.2 million square feet of hospital space under way – about a million square feet ahead of the runner up, New York.
MedCraft Healthcare Real Estate was the most active developer in 2017 with a total of 8 projects and 470,000 square feet started or completed. NexCore Group was the most active for project starts and HTA Development LLC was the most active for project completions.
Continuing focus on high medical office sales activity might lead one to wonder where all this activity is occurring. In 2017, more than 25% of sales volume was represented in only 5 metro areas. Who's leading the pack?
The Revista/Healthcare Real Estate Insights 2017 Outpatient Development Survey is Now Open - click to participate!
Healthcare Real Estate Insights and Revista have partnered to create the healthcare real estate industry's most comprehensive survey of outpatient medical construction activity.
2017 will have broken many records in terms of sales transaction activity in healthcare real estate, but it won’t in terms of new construction. Revista data is showing 3 consecutive years with a decrease in starts which is now also affecting total deliveries. Only 16.3M square feet was delivered in 2017, 15% less than the previous year's total of 19.3M.
Doctor visits will increase 217.6% faster than the population in Los Angeles, Orange, Riverside, San Bernardino, and San Diego Counties. That’s according to an analysis prepared for the California Hospital, Outpatient Facilities & Medical Office Building Summit in Downtown Los Angeles on December 13.