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Thought Leaders: Impact of COVID-19 leads healthcare organizations to consider leasing vs. owning


MINNEAPOLIS, Minn. (July 11, 2022) – In a survey of healthcare professionals on their real estate priorities conducted by Ryan Companies US, Inc., an astounding 70% of respondents indicated they are considering leasing instead of owning in the future. As COVID-19 continues to make an impact on healthcare, leasing provides more flexibility with real estate dollars.
“Healthcare organizations must make sound investments that maximize limited resources and anticipate future service needs, like the continuing shift to outpatient environments and how the needs of their communities are changing,” said Mike McMahan, executive vice president of healthcare, Ryan Companies.

Nearly one in five respondents cited putting COVID-19 relief funds toward remodeling or renovating as they grapple with historic staffing shortages, changing technology and consumer preferences. These results suggest that organizations are more inclined to invest in existing facilities rather than building new inpatient facilities, which only 5% of respondents indicated they would consider.

Of the 70% that indicated they would consider leasing over owning, 40% said “somewhat likely,” 17% said “likely” and 13% said “very likely.” Examining the results even further, respondents were grouped according to their organization type. The first group consisted of hospital, health systems and medical clinic respondents. The second group consisted of senior living, insurance company and other respondents. While the first group was more neutral, the second group leaned more heavily on “likely” and “very likely” to lease. While there are varying perspectives among the groups, the commonality is the ability to test or expand into new markets with the spending flexibility that comes with leasing.

“Despite the volatility in the market, it is still a great time for providers to access third party capital to fund development projects,” said Andrew Twito, vice president of capital markets, Ryan Companies. “Healthcare real estate investors continue to provide competitive debt and equity for leased projects allowing providers to reinvest capital in healthcare delivery instead of trapping equity in real estate ownership.”

On behalf of Ryan, Modern Healthcare Custom Media commissioned Signet Research, Inc, an independent company, to conduct a survey of healthcare professionals. The goal of the study was to learn about real estate priorities, including barriers to strategy implementation and factors influencing uses of physical spaces. A total of 98 responses were received between March 3, 2022 and April 15, 2022.

To see more results from the survey, visit https://www.ryancompanies.com/how-healthcare-facilities-are-transforming-future. To schedule an interview, contact Erica Dao at erica.dao@ryancompanies.com.

About Ryan Companies
Founded in 1938, Ryan Companies offers comprehensive commercial real estate services as a national developer, designer, builder, capital markets advisor and real estate manager with a focus on creating places for people to thrive. Ryan work spans a wide range of sectors and product types including healthcare, hospitality, industrial, mixed-use, multifamily, office, retail, and senior living. Built on the foundation of integrity, honesty and community, Ryan has grown to more than 1,800 team members in 17 offices and has completed projects in nearly every state. For more information, visit ryancompanies.com.


Erica Dao
Sr. Public Relations Manager

(p) 612-492-4857
(c) 612-532-6542


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