Publisher’s Letter: Time to play it smart


by Murray W Wolf

Dear Reader:

During the past year, it’s safe to say that we have dispensed with the notion that healthcare real estate is recession-proof.

But we’re now beginning to get a troubling taste of how the recession might ultimately affect this sector.

Clearly, there are still opportunities for clever and well-capitalized healthcare real estate developers and investors. And, yes, healthcare still accounted for 16.2 percent of Gross Domestic Product (GDP) in 2007, up from 16 percent in 2006. Likewise, although the 2008 figures aren’t available yet, healthcare spending is likely to look even stronger relative to the rest of the recession-battered economy.

But will that just be a bigger slice of a smaller pie? Consumer confidence is at a historic low, and there are reports that folks are cutting healthcare spending, particularly elective procedures. Reduced patient volumes obviously mean reduced revenues for hospitals, health systems and physician practice groups.

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