December 21, 2017
John B. Mugford

Top HRE professionals foresee good prospects in 2018

By John B. Mugford, Editor, Healthcare Real Estate Insight

While there is some concern and uncertainty about what the next year holds for the country’s healthcare system, some of the top professionals involved in healthcare real estate are quite bullish about their business prospects for 2018.

In an informal, anonymous straw poll of members of the Editorial Advisory Board (EAB) of Healthcare Real Estate Insights in late November, 78 percent of those in attendance at an annual meeting said they foresee their business increasing by 10 percent or more in the next year. The survey was conducted during HREI‘s EAB meeting in Nashville, where 25 of the 32 board members in attendance said they expect business growth of 10 percent or more next year.

The EAB comprises professionals from most of the top companies in healthcare real estate, including traded and non-traded real estate investment trusts (REITs), private investment funds, development firms, brokerage and investment banking firms, law firms, health systems, and others.

Of those in attendance, only three said they foresee their business remaining flat or dropping in the year ahead. One board member noted that while he expects business to remain strong in 2018, his firm might see a slight drop in business simply because it cannot count “on the mega deals that we were involved with in the last year.”

Another board member, who is expecting a slight drop in business in the year ahead, noted: “We see our business slowing down just a bit, mostly due to uncertainty in the healthcare industry as a whole because of slower decision-making by the healthcare providers.”

Most of the others, however, foresee plenty of opportunities to grow their businesses. One professional said he/she expects business to double in the year ahead, while another predicted growth of 75 percent. A few others predicted growth of 50 percent or so, in large part because of the addition of new service lines and/or clients.

One board member, who expects a 25 percent increase in business, wrote: “We think that the industry as a whole will remain in a stable, growth mode in 2018.”

However, during an on-the-record discussion concerning the year head for the overall healthcare real estate sector, board members noted that there is a potential disruptor on the horizon.

That potential disruptor could be what several referred to as a “black swan” event, such as a stock market crash and/or recession, some type of major disruption in the world economy, or, as an example, an escalation of the current tensions between the United States and North Korea.