flexiblefullpage -
billboard - default
interstitial1 - interstitial
Currently Reading

CBRE finds that investors are still flocking to healthcare sector

Healthcare Facilities

CBRE finds that investors are still flocking to healthcare sector

Over the past year, healthcare accounted for nearly one-fifth of all new jobs in the U.S.


By John Caulfield, Senior Editor | May 30, 2016

The expanded and renovated First Hill Medical Pavilion in Seattle sold for a record amount early this year, an indication that the healthcare sector continues to lure investors. Image: CollinsWoerman

In the first quarter of 2016, there were 163 transactions of medical office buildings totaling more than $1.8 billion in volume, according to estimates by CBRE, the nation’s largest real estate services provider, in its latest “National Healthcare Real Estate Investor Update.”

By far the largest transaction occurred last January, when a joint venture between Chicago-based Heitman Capital and Denver-based NexCare Group paid $199 million to acquire the 227,628-sf First Hill Medical Pavilion in Seattle.

That facility, which last year underwent an extensive renovation and 63,000-sf addition, is positioned adjacent to the Swedish Medical Center campus that’s part of Providence Health & Services healthcare system, which leases 65% of First Hill. (The architect of the reno and expansion was CollinsWoerman; the GC was Lease Crutcher Lewis.)

CBRE observes that the healthcare section continues to be “one of the strongest job generators in the American economy.” Quoting Bureau of Labor Statistics data, CBRE notes that between April 2015 and April 2016, healthcare produced 482,000 jobs, or roughly 18% of the 2.7 million nonfarm jobs formed in the U.S. during that period.

Last year, the number of uninsured Americans stood at 9.1% of the total population, the first time in the country’s history that number had fallen below 10%. Last year’s future compares to 16% in 2010, the year the Affordable Care Act was enacted.

CBRE also points to a recent Accenture study of six years of hospital margin data and patient satisfaction scores. Top-ranking hospitals achieved markets that, on average, were 50% higher than those with average scores. The top hospitals’ revenue growth also outpaced their operating expenses.

The healthcare sector could become even more attractive to certain investors after new regulations went into effect in April that mandate greater transparency and disclosure for non-traded REITs in such areas as per-share valuation and dividend distribution.

The new regs prohibit the public offering of securities of a REIT or direct participation program unless the sponsor agrees to annually disclose (at a minimum) the per-share value of each security.

“Investors of non-traded healthcare REITs now stand to benefit from these regulations aimed at fundamentally revising this investment product that has long been characterized with nontransparent share prices and high commissions,” CBRE writes. “Healthcare real estate is still very much in demand and will continue to attract broker-dealers to offer the non-traded REIT products. The existing sponsors in the market are expected to continue to thrive while making it more difficult for new sponsors to enter the space.”

 

Related Stories

Healthcare Facilities | Jun 22, 2022

Arizona State University’s Health Futures Center: A new home for medical tech innovation

In Phoenix, the Arizona State University (ASU) has constructed its Health Futures Center—expanding the school’s impact as a research institution emphasizing medical technology acceleration and innovation, entrepreneurship, and healthcare education.

Healthcare Facilities | Jun 20, 2022

Is telehealth finally mainstream?

After more than a century of development, telehealth has become a standard alternative for many types of care.

Codes and Standards | Jun 14, 2022

Hospitals’ fossil fuel use trending downward, but electricity use isn’t declining as much

The 2021 Hospital Energy and Water Benchmarking Survey by Grumman|Butkus Associates found that U.S. hospitals’ use of fossil fuels is declining since the inception of the annual survey 25 years ago, but electricity use is dipping more slowly.

Healthcare Facilities | Jun 13, 2022

University of Kansas Health System cancer care floors foster community and empathy

On three floors of Cambridge Tower A at The University of Kansas Health System in Kansas City, patients being treated for blood cancers have a dedicated space that not only keeps them safe during immune system comprising treatments, but also provide feelings of comfort and compassion.

Sponsored | Healthcare Facilities | May 3, 2022

Planning for hospital campus access that works for people

This course defines the elements of hospital campus access that are essential to promoting the efficient, stress-free movement of patients, staff, family, and visitors. Campus access elements include signage and wayfinding, parking facilities, transportation demand management, shuttle buses, curb access, valet parking management, roadways, and pedestrian walkways.

Healthcare Facilities | Apr 19, 2022

6 trends to watch in healthcare design

As the healthcare landscape continues to evolve, IMEG’s healthcare leaders from across the country are seeing several emerging trends that are poised to have wide-ranging impacts on facility design and construction. Following are six of the trends and strategies they expect to become more commonplace in 2022 and the years to come. 

Healthcare Facilities | Apr 14, 2022

Healthcare construction veteran creates next-level IPD process for hospital projects

Can integrated project delivery work without incentives for building team members? Denton Wilson thinks so.

Market Data | Apr 14, 2022

FMI 2022 construction spending forecast: 7% growth despite economic turmoil

Growth will be offset by inflation, supply chain snarls, a shortage of workers, project delays, and economic turmoil caused by international events such as the Russia-Ukraine war.

Laboratories | Apr 7, 2022

North Carolina's latest play for biotech real estate development

The Tar Heel State is among a growing number of markets rolling out the welcome mat for lab spaces.

Healthcare Facilities | Apr 7, 2022

Visibility breeds traffic in healthcare design

Ryan Companies has completed several healthcare projects that gain exposure by being near retail stores or office buildings.

boombox1 - default
boombox2 -
native1 -

More In Category




halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021

 


Magazine Subscription
Subscribe

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Subscribe

Follow BD+C: