HREI board members are encouraged by the potential for rate cuts in 2024
By John B. Mugford
HREI Editorial Advisory Board members said during a recent Zoom call that they were encouraged by the U.S. Federal Reserve’s Dec. 13 decision to keep interest rates the same, and the suggestion that it might begin reducing rates in 2024. (HREI™ photo)
With just one announcement, the outlook for the healthcare real estate (HRE) sector – and much of the business world – has changed drastically.
That announcement, of course, came last Wednesday, Dec. 13, when U.S. Federal Reserve Chair Jerome Powell revealed that the Fed would not be raising interest rates in the near future and that it might even reduce rates in the year ahead.
In what can be considered fortuitous timing, the next day, Thursday, Dec. 14, more than 20 members of the Editorial Advisory Board of Healthcare Real Estate Insights™ (HREI™), who represent many of the top firms in the HRE sector, met on a previously scheduled Zoom videocall to discuss the current state of the HRE market. The videocall was hosted by HREI Publisher Murray W. Wolf and Editor John B. Mugford
When it was put on the calendar a few weeks earlier, the videocall seemed to have the makings of a rather gloomy conversation, likely to focus on rehashing a year that saw a significant decline in the volume of medical office building (MOB) sales, as well as a sizable dip in the development of new projects.
However, coming a day after the encouraging words from the Fed, the hour-long discussion was cautiously upbeat. Many of the HREI editorial board members expressed guarded optimism that the HRE market will finally begin to rebound in 2024, albeit slowly, toward previous levels of transaction volumes and construction starts.
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