Commercial Real Estate Finance

Posts Tagged ‘Obamacare’

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 »

Thursday’s Executive Interview with Kevin McGowan has gotten me thinking about current  legislation and its impact on our industry. Particularly, I’ve been pondering the effect of the Supreme Court’s controversial ruling in support of Obama’s Affordable Care Act. What are the long-term effects of such political actions, especially when it comes to CRE’s healthcare and senior living sectors?

The initial reactions from healthcare REIT execs, such as Debra Cafaro of Ventas (NYSE: VTR), have been very positive. After all, increasing medical coverage to a greater percentage of the population will naturally create a higher demand for new or expanded hospital and medical office buildings. As the investment community looks forward to this increased opportunity, the healthcare sector is enjoying greater prominence and  activity.  Read the rest of this entry »

Today, we have executives from two different firms discussing how, or if, the president’s controversial healthcare reforms will affect their businesses.

First, Debra Cafaro, CEO of Ventas (NYSE: VTR), discusses her high-performing senior living investments as they relate to the Affordable Care Act, Medicare, and other government actions:

Read the rest of this entry »

In recent years, few issues in the U.S. have been more of a political lightning rod than healthcare reform (i.e., “Obamacare”). Even though the full effect of this legislation is yet to be felt, public reactions have been quite–to put it nicely–passionate. Healthcare has become something of a moral controversy, with all the fiery rhetoric that entails.

Regardless of the debate, healthcare is a booming industry. No amount of regulation will change that, because the demand is so great.

For commercial real estate investors and operators, the medical real estate sector has become something much greater than a “niche,” for several reasons:

Read the rest of this entry »

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 »