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Feature Story: HRE update from the front lines

CBRE leasing pros discuss market hardships, what the recovery might look like

By John B. Mugford

As could be expected, smaller medical practices, especially those that may have been struggling prior to the current crisis or those involved in ambulatory surgery centers (ASCs), are being hit the hardest by the COVID-19 pandemic.

Still, for the most part, most medical office building (MOB) tenants are paying their rents, with many building owners reporting that roughly 85 percent or so of them have done so to date without asking for relief or deferments.

And, even though larger health systems are surviving, still paying rent in medical office buildings (MOBs) where they lease space and have good prospects for the long term, the financial burden they are experiencing from responding to the pandemic and by not being able to provide elective procedures could halt some of their plans, at least in the short term, for growth after the pandemic runs its course.

Yet, despite the hardship being faced by many involved in healthcare and healthcare real estate (HRE), there does seem to be a light at the end of the tunnel as some states start to ease restrictions on businesses in general as well as healthcare providers.

These messages about how tenants and medical properties are holding up during the COVID-19 pandemic, as well numerous others, were conveyed by a group of medical office leasing professionals in a variety of markets nationwide for Los Angeles-based CBRE Group Inc. (NYSE: CBRE).

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