Medical real estate presents a highly resilient and reliable investment opportunity.
An aging population, expanded insurance coverage, demand for efficient health delivery systems, and increasing healthcare employment have all led to increasing demand for medical office real estate.
People are living longer with the help of modern medical technology, increased physician visits and greater awareness and adoption of healthier nutrition and lifestyle.
Rapid growth and aging of the U.S. population is anticipated to create greater demand for healthcare services and facilities.
The population over 65 is projected to increase 174% between 2020 and 2060 – that is 42 million additional people.
The average number of medical office visits (per 100 persons/year) for ages 65 and above is 619 compared to 233 for ages 0-64. That’s more than a 250% increase.
In 2017, annual national healthcare expenses neared $3.3 trillion, or 18.3% of Gross Domestic Product (GDP).
By 2025 Americans will spend more than $5.5 trillion annually on healthcare, nearing 20% of the nation’s GDP.
Hospital care and physician/clinic services combined comprise 54% of the total healthcare expenditures.
From 2010-2020, the fastest growth will occur in healthcare and other forms of social assistance, adding 5.7 million jobs – a quarter of the total job growth.
The forecasted job growth of the healthcare industry from 2014 -2024 is 21.8%, which is much higher compared to the service sector (7.8%) and non-healthcare sector (4.8%).
By 2022, nearly one in eight U.S. jobs are projected to be in the healthcare sector.
The medical office market has performed well in recent years, especially during the recession. The peak vacancy rate was lower than traditional office properties.
Overall occupancy in medical office remains above 92%.
Occupancy of Class A/B medical office is above 94%.
© Everest Healthcare Properties, LLC