Despite economic uncertainty, healthcare real estate investments continue to be recession-resistant, and a high-cash yields industry compared to similar industry profiles. Flagship Healthcare Properties’ (Flagship) latest report, “Inside the Recession Resistant Healthcare RE Industry,” delves further into why medical offices are resilient through economic cycles and are a lower risk alternative for those interested in diversifying or growing their real estate investments. Key findings from the report include:
• Demand for services. Healthcare is an essential with 92% of the U.S. population having some form of health insurance coverage.
• Shifting demographics. In the U.S., a Baby Boomer turns 65 every 8 seconds, or nearly 11,000 each day. As this population continues to age, their need for care will grow exponentially.
• Demand for space. Telehealth utilization is declining while in-person visits are rising following the pandemic. Medical offices across the U.S. are experiencing high occupancy which is leading towards a lack of available inventory.
• Site of care delivery. Outpatient and ambulatory surgery care is more affordable for patients and cost effective for providers. By 2032, outpatient care is projected to increase by 18.7% while ambulatory surgery services are expected to increase by 14%.
• Long-term tenancy and stable cash flow. Healthcare providers are invested in their locations from a facility and market share perspective. Lease term for medical offices average 12.5 years, compared to an average of 4.3 years for general offices in the U.S.
More details are in the full post, available here.
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