Industry Pulse: March 2009

WASHINGTON – As we all know by now, healthcare is not recession-proof. However, it was one of the few sectors to add jobs in 2008, as an estimated 371,600 healthcare jobs were added last year, according to the U.S. Bureau of Labor Statistics. In December 2008, as the rest of the economy was shedding jobs, the healthcare industry added 31,600 positions, the Bureau of Labor Statistics reports. Also, healthcare spending the United States accounted for 17 percent of the gross domestic product (GDP) in 2008, according to the National Coalition on Health Care. The coalition projects that healthcare spending will continue to rise and reach 20 percent of the GDP by 2017. With the population continuing to age, these statistics bode well for healthcare real estate professionals and service providers, such as developers, lenders, investors, brokers, construction firms, architects and consultants. One such professional, Dan Dolsen, the managing director of national healthcare services for CB Richard Ellis (NYSE: CBG), has been quoted as saying the focus will be on new construction or renovations of hospitals, specialty cancer and cardiac centers, and medical office buildings (MOBs). In an e-mail, Mr. Dolsen adds that seniors housing is an emerging part of the package. He believes that as hospital and health system executives look for new sources of revenue to serve their communities, more of them will get involved in seniors housing. This could entail adding a seniors housing component to a hospital campus, either in a joint venture with the hospital or as a separate entity owned and operated by third parties, almost like the building of on-campus MOBs. (You can read more about the state of the senior living market in next month’s edition of Healthcare Real Estate Insights^™.)