Carmel, Indiana, located in the northern suburbs of Indianapolis, has become a hot target of healthcare providers and associated real estate developers over the past few years. Revista is tracking several in progress and planned medical real estate developments sponsored by difference providers and developers.
In past metro highlights we’ve talked about growth markets with lots of construction activity, interesting markets with innovative health systems, metros with the highest sales volume, but what about the tightest markets? The ones with the highest rent growth, the most expensive pricing and the lowest vacancy? Flipping through our Metro Rankings report, San Francisco clearly fits the bill.
Over the past year or so there have been many headlines speaking to how hot the medical real estate sector is. You see them pop up in your email or news feed: "Sales volume is at all time highs"..... "New investors are entering the sector right and left"...."Medical Real Estate Hitting Post Recession Peak". At times like this, many investors are getting priced out of the 'cream' offerings that trade and the heavy weight health system construction projects. So it would stand to reason that those interested parties would look elsewhere....and they are.
2019 National Economic Outlook for Medical Real Estate Stakeholders:
Back for the first time since 2015, Dr. Sam Chandan will join us to provide an update on the most important economic trends and their implications for healthcare real estate today. Renowned as one of the leading experts in economics, capital markets and commercial real estate, Dr. Chandan will provide his innovative insights into the macro forces that are currently affecting - and are likely to affect - the real estate investment environment.
The growing size of medical office buildings and the related need for healthcare providers to utilize third-party capital is increasing opportunities for institutional investment in the sector.
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.
The Mid-Year Revista transactions report has been released and is available to subscribers. Check out some of the highlights!
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.
Following a record year for transactions when $16.6B worth of MOBs traded hands, overall volume is showing signs of moderating through the first 2 quarters of 2018.