Healthcare Sector in Real Estate
The healthcare sector in commercial real estate has seen a lot of growth recently. Many firms have acquired healthcare facilities over the past year. Urgent care facilities and hospitals are necessities, so it’s no wonder that investors are snagging them up. Since a good chunk of the population is aging, many don’t have the energy to travel for basic health services. On the other hand, younger adults prioritize urgent care and are more likely to use those facilities than Baby Boomers. Because we live in an aging population, investors and developers can see the demand in facilities; thus, the healthcare sector will continue to grow. New trends have emerged in this sector; we’re seeing that people appreciate care and attention in atypical ways.
Creating A Serene Environment in Facilities
There’s a focus on incorporating hotel-like amenities in hospitals to make patients feel more relaxed. A serene environment with pretty views can help reduce stress and speed up the healing process. Additionally, adding features such as art galleries, soft music, and gardens can help patients cheer up and not feel like they’re cooped up in a hospital bed. Hotel-like clinics are becoming the new trend in this industry.
New York-based hospital, Lenox Hill Hospital, plans to enhance its rooms by creating a boutique hotel experience for patients. Separate rooms with kitchenettes are also available for families of the patient. Facilities like this one are going above and beyond with service to make their patients feel comfortable.
In addition to hotel-like clinics, many facilities have downsized in terms of number of beds. Patients appreciate larger beds, so hospitals have decreased the number of beds. Facilities are also revamping rooms by allowing several private rooms for short-stay patients.
Interestingly, pharmacies are looking to integrate retail features and amenities. For instance, Walmart wants to add a spa-like treatment center at a premium price to appeal to those who want high quality service and reduced wait times. Consumers value quality customer service, so adding amenities to these places can help consumers feel comfortable in an uncomfortable setting.
There is mostly a positive outlook for growth in facilities, urgent care, and pharmacies. Because many retailers have declined, investors can snag these vacancies and transform them into healthcare facilities such as nursing homes, hospices, specialized care, and more.
On another note, medical office buildings are not as appealing as other assets in the market due to regulatory issues, which we touched on earlier this year. They’re also extremely expensive compared to other related assets. However, investment volume for MOBs increased significantly last year to $10.2 billion. In general, acquiring healthcare facilities is beneficial for firms because the assets can help diversify firms’ portfolios.