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Editor’s Letter: Optimism reigns in HRE

HREI editorial board members foresee a strong ‘15

Dear Reader:

John B. Mugford

John B. Mugford

The members of the Healthcare Real Estate Insights™ Editorial Advisory Board have been quite optimistic about the healthcare real estate (HRE) sector heading into each of the past three years now. And we’re happy to report that they have been right on with their predictions.

So when we gathered with them for a day of informative, exploratory discussions and presentations at our annual meeting in fall 2014, we once again conducted an anonymous, unscientific survey to gauge how their businesses fared in 2014 and what they foresee for the next year or so.

As was predicted, a vast majority of them, 92 percent, said their business stayed the same or increased by at least 1 percent in 2014. And 60 percent reported that their firms experienced an increase in business of at least 10 percent in 2014, which has been widely hailed as a big year for the sector both in terms of facility sales and development.

Of those who took part in the survey, 92 percent said their business stayed the same or increased by at least 1 percent in 2014.

However, in looking ahead to 2015, the board members were more optimistic than during any of our previous surveys, with 66 percent of them saying they expect to see their business increase by at least 10 percent in 2015. All but one of those who took part in the survey said their business will not remain the same or increase in the coming year.

While that does not necessarily guarantee profitable years for everyone involved in HRE, it does bode well for the sector as a whole. That’s because our Editorial Advisory Board, which provides us with unbiased critiques of our magazine, represent some of the most successful and well-known people and organizations in the HRE sector.

They are on top of the latest trends because they need to be in order keep their businesses growing and adapting to the always-changing healthcare environment.

If there is a caveat on the horizon, it is that this incredibly strong period that we are currently experiencing can be, naturally, expected to peak in the not-too-distant future. During a discussion about the future of the sector, quite a number of board members said that when we all look back at this period a few years from, we will all consider 2014-15 to be the peak of the market in terms of demand for healthcare facilities.

I guess we’ll have to wait and see what they think next year heading into 2016.

John B. Mugford, Editor

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