Health Care Growth in Real Estate


If you have the opportunity to invest in Class A medical office space, take part. With the Affordable Care Act now well underway, there's a growing boom in the space thanks to newly insured Americans. In fact, as more than 32 million Americans pick up health insurance, the demand for office buildings could pick up by 19%, according to the Urban Land Institute, which believes the need for an estimated 64 million square feet of additional medical office building space could dwarf current needs.

“You’re going to see a need for large amounts of square footage leased by large groups and hospitals; they’re going to see more patients than they’ve ever seen before and see them quicker,” notes said Garth Hogan, executive managing director of global healthcare services for Newmark Grubb Knight Frank, as quoted by Commercial Property Executive.

At the same time, every day for the next 20+ years, more than 10,000 baby boomers will reach retirement age, increasing the overall demand for medical office space. “Investors are clearly savvy to these trends. While sales volume for nearly all CRE product types are still hovering at 2004 levels, sales of medical office buildings posted a record high in 2012,” notes commercial real estate services firm, Cassidy Turley.

Class A properties will be prime beneficiaries, providing wild returns.