Feature Story: The economy is taking its toll on HRE, for now

Economist John Chang, GlobeSt panelists still tout the sector over the long haul

By John B. Mugford

Economist John Chang said that despite a short-term slowdown in deals and development, HRE fundamentals remain strong. (HREI photo)

“It’s been a hell of a year, right?”

In making this statement, John Chang, senior VP and national director of research and advisory services with Calabasas, Calif.-based Marcus & Millichap Inc. (NYSE: MMI), was not only saying that it’s been a wild ride for the economy and most business sectors in 2022, including the healthcare real estate (HRE) sector, but a difficult one.

The well-known economist’s remark was his opening statement during the keynote presentation at the GlobeSt Healthcare 2022 conference Dec. 6-7 at the Andaz Scottsdale Resort & Bungalows in Scottsdale, Ariz.

“When we look back at where we started (2022), in January and February, things were looking great,” Mr. Chang began during a presentation titled, “The Healthcare CRE Landscape: The 2023 Investment Outlook.”

“Business was good” (in early 2022) and interest “rates were low. People were feeling the positive energy,” he said. “But then we got into March and we had that first rate increase, 25 basis points (bps), and it just kept going from there.”

As of last week, at the time Mr. Chang’s presentation,

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