Monday, August 1, 2011

New Demand for Medical Office Space is on the Horizon



ATLANTA, GA (August 1, 2011) - Healthcare reform could soon fuel a boom in medical real estate.

The "Commercial Real Estate Show" this week talked with experts in healthcare and medical real estate for an overview of this market and insights into the effects of healthcare reform. The show also provided some great strategies and tips for both medical tenants and landlords.

When healthcare reform was first passed, speculation ran wild that adding so many new patients into the ranks of the insured could fuel demand for 60 million square feet of new medical office space. Now estimates are more conservative, but still significant.

"They don't necessarily feel that it will create demand for 60 million square feet of new space -but even if it's half or a third of that - and with the new products that the systems are going to need, it's kind of an exciting time for development firms," said John Mugford (top right photo) senior editor of Healthcare Real Estate Insights.

But there is still uncertainty about healthcare reform, as many states have filed lawsuits claiming the new federal laws are unconstitutional. The two most prominent cases are in appeals and are expected to reach the U.S. Supreme Court. All eyes are on these cases to see what happens next.

Meanwhile, demand from investors for medical office buildings is also growing, agreed experts on the show. As a result, sales volumes are rising.

Sales volumes of institutional quality medical office buildings reached $2.9 billion in 2010, compared to only $1.6 billion in 2009, said Paul Zeman (middle left photo), Partner with Healthcare Real Estate Services at Bull Realty Inc.

"We are seeing the bottom of the curve trending upward now," Zeman said.

The show aired Saturday on Biz 1190 in Atlanta and is available for download here. Other guests included Victor Moldovan (bottom right photo), a Partner at McGuire Woods LLP, and Leo Griffin, Vice President of Healthcare Real Estate Services at Bull Realty Inc.

The next "Commercial Real Estate Show" airs August 6, providing an update and inside look at the single tenant net lease industry. We'll get the scoop on cap rates, current financing terms, the most sought-after properties and the possible impact of upcoming FASB accounting changes and a lot more.
  
. Contact:
Laura Dudebout
O: 404.965.5023
C: 678.642.4301

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