Healthcare Construction Projects Start on Time, Deliveries Delayed
2019 was a big year for medical office construction starts. 28.8 million square feet broke ground during the year, the most in a year since Revista has been tracking it. That’s roughly 2% of inventory, much over the usual 1.5% run rate of annual inventory growth. Based on planned projects, a slow down in starts in the beginning of this year was expected. But for those scheduled starts, even into March and April, projects moved forward with few exceptions. Projects scheduled to open, however, have a different story. Of 108 projects scheduled to open in March and April, 40 were moved back at least 30 days. With many states restricting non-emergent visits and procedures during this time, the delays make sense. After all that inventory started last year, 2020 should be big on deliveries, but if delays continue into 2021 it may look relatively flat. Moving forward, further delays and even cancellations are likely both for new project starts and openings due to labor shortages, supply chain issues, budget cuts and other side effects of the COVID crisis. Stay with Revista as we continue to follow this and other developing trends!