Commercial Real Estate Finance

Posts Tagged ‘healthcare real estate’

And when I say MOB, I’m talking about Medical Office Buildings. It’s an acronym.

This blog has no affiliation with the mob.

Let me start over. The idea for this post came from a great CoStar Group article published last month. In it, Randyl Drummer points out the uptick in medical office deals that’s resulted from changes in medical care, technology, demographics, and healthcare regulation (i.e., the Affordable Care Act).

Mr. Drummer explains,

Continued health-care employment growth, combined with the expected increase in demand for medical crae [sic] services from the aging population is expected to continue to drive development of medical ambulatory care facilities, including MOBs, surgery centers, urgent care clinics and diagnostic lab facilities.

The healthcare industry is the largest job creator in the country, and one of the largest drivers of economic activity in cities big and small. Healthcare, of course, is also extremely complicated, affected by large private interests, government agencies, and ever-changing rules. The fact that investors and developers are pursuing opportunities in the highly regulated healthcare sector–despite the layers of bureaucracy that often make medical establishments onerous for business interests–shows a great deal of confidence in the sector’s overall growth.

There’s no denying the demand for healthcare real estate. This is a product of both an aging population and increased availability of medical coverage (courtesy of Obamacare). But the additional capital demands this will create (for insurance companies, the government, employers, and individuals) will also result in greater demand for less expensive medical options. This is why the MOB–Goodfellas connotations aside–seems an especially promising niche in the healthcare real estate sector. Read the rest of this entry »

According to Richard LeFrak of the LeFrak Organization, Hurricane Sandy has been extremely costly for real estate owners in New York City, particularly in Downtown Manhattan and Brooklyn. Plumbing and electrical damage in flooded properties will require extensive repairs, he says:

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Commercial Real Estate Week in Review for the Week of June 4th to June 10th

- REITs Are the Light at the End of the Economic Tunnel.

- It’s Quality vs. Quanity With Glimcher Realty Trust (NYSE:GRT).

- REIT Investors May Need a Reality Check.

- General Growth Properties (NYSE:GGP) Refinances Five Retail Centers.

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While attending RealShare Philadelphia 2010 recently, Dr. Peter Linneman, a renowned economist and UPenn professor spoke about the economy and its impact on real estate.  He made a very interesting observation regarding the stagnation in the economy, and subsequently, its strain on commercial real estate.

“How many of you watched the Super Bowl?” he asked. “What if when the Saints scored a touchdown, the refs decided to put up 6 points for the Colts?  What if when the Colts kicked a field goal, the refs decided not to award them any points?  What if the refs started making tackles and intercepting passes?  Would you bet on that kind of game?”  Rhetorically, he followed, “No, you would probably turn the game off after 10 minutes.  Why?  Because as entertaining as it may be, its a stupid game and impossible to predict the outcome.”

“Regulators enforce the rules of the game to be played, much like referees in sports. Right now”, Linneman says, “the Fed, FDIC, and Federal Government, all of whom are supposed to be regulators, and thus referees, are acting as players too.” Read the rest of this entry »

What is the one real estate sector that is the hottest right now?  Despite the availability of capital through Fannie and Freddie, its not multi-family.  Despite the rising age of baby boomers, it is not senior living.  Despite the immense growth in the healthcare sector, it is not medical office. So what is it?  Data Centers.  Last year, I wrote about data centers in this post.  Yet, seemingly nobody in the real estate sector has caught on.  So before I go on, let me get you all up to speed. Read the rest of this entry »