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Three Health Care Investment Trends For 2022

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The healthcare sector was one of the beneficiaries of the pandemic, and the industry is rapidly growing.

As investors plan for 2022, Meridian CEO John Pollock is predicting three trends will drive activity healthcare real estate.

1. More Outpatient Facilities

The transition to outpatient facilities has been an ongoing trend over the last decade, and it accelerated during the pandemic.

“Services are migrating away from the acute care centers to more convenient outpatient centers” Pollock tells GlobeSt.com. “Ambulatory outpatient care facilities have been at the center of Meridian’s focus for years and we expect this trend to continue to accelerate and translate into more opportunities for investors, developers, and providers alike.”

2. Telehealth Gaining Momentum

Telehealth is the second major trend that Pollock sees gaining momentum this year.

“Everyone has read about the rapid adoption of telehealth during the pandemic. It certainly spiked in 2020, and while it has since leveled off, it is still an integral and effective means to deliver care,” Pollack says. “The physical manifestation of that trend is creating more flexible exam and telehealth rooms.”

The telehealth trend supports better patient care, especially as providers rush to build outpatient ambulatory facilities.

“We have seen an increasing need for outpatient ambulatory care centers either de novo or through renovations that require heavy lifting to meet the new care delivery models,” says Pollock. “A huge benefit of telehealth is providing greater access to care. During the pandemic, it provided a vital access point to care when physical appointments were not practical. Telehealth also allows patients in rural settings to have access to a specialist from the urban centers.”

3. A Focus On Behavioral Health

Finally, health care providers will increase focus on behavioral health.

“We are seeing numerous requirements,” says Pollock. “The stress, isolation and loss caused by the pandemic was the final straw and it is now widely known that behavioral health conditions impact one in four Americans.”

It isn’t only cultural changes that are driving activity in the behavioral space, but institutional investors are also backing these projects.

“Institutional investors have warmed up to having behavioral health tenants in their buildings and portfolios, and we have even seen cap rates move toward traditional medical office building valuations,” says Pollock. “It’s very exciting to be a part of creating more access to these much-needed services in our communities.”

 

Source: BenefitsPRO

Investors Are Flocking To MOB And HRE Space

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Currently in the growing and highly visible medical office building (MOB) space, a couple of questions seem to be garnering most of the attention.

One of those is: Will the influx of new capital, including large amounts from deep-pocketed institutional investors and investment managers, slow down in the near future?

The other is: Will capitalization (cap) rates, or first-year expected returns, stop their unprecedented compression to historic lows, even amid rising inflation and potentially higher interest rates, anytime soon?

The answers seem to be “no” and “no,” according to a panel discussion that took place at BOMA International’s 2021 Medical Office Building + Healthcare Real Estate Conference held Nov. 1-3 at the Omni Dallas Hotel.

The session was titled “The Investor Flight Toward Healthcare Real Estate” and the discussion heavily focused on growing institutional investment in the MOB and HRE space, as well as soaring pricing and falling yields for the product type.

The panelists taking part in the session included two MOB sales brokers, two healthcare real estate (HRE) specialists with institutional investment firms that are somewhat new to the space, and a Wall Street research analyst who covers public companies. They were:

■ Moderator Ben Appel, executive managing director with the Healthcare Capital Markets group of Newmark Group Inc. (Nasdaq: NMRK);
■ Mindy Berman, senior managing director and head of the healthcare capital markets platform with Jones Lang LaSalle Inc. (NYSE: JLL);
■ Vikram Malhotra, managing director and research leader for Mizuho Americas;
■ Pratik Patel, director with New York-based Wafra Inc., which in late 2020 formed a $550 million joint venture (JV) partnership with Welltower Inc. (NYSE: WELL) that entailed Wafra acquiring an 80 percent ownership in 24 MOBs; and
■ Jennifer Wong, VP of acquisitions with Boston-based AEW, which has formed partnerships with firms in the sector, including a recently formed JV with Nashville, Tenn.-based Montecito Medical Real Estate that plans to spend up to $1 billion in coming years on acquiring MOBs.

 

Source: HREI

Borrowers And Lenders Are Adapting To The Hot Heathcare Real Estate Market

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When it comes to financing medical office building (MOB) acquisitions, the cost of capital is not always the most important factor in choosing a lender.

“In fact, when a nine-property MOB portfolio in the Atlanta area changed hands in a sale-leaseback transaction in late 2019, the borrower on the $25 million loan chose to go with a lender that did not have the lowest cost but that knew the tenant best so that they could make sure that everything would go quickly through due diligence and get to closing and not hit any bumps along the way,” said Sabrina Solomiany, a first VP, US Healthcare Capital Markets Debt & Structured Finance with CBRE Group Inc. (NYSE: CBRE), who helped line up the debt for the buyer. “It was very competitive, but ultimately we went with Synovus, with part of the reason being that even though they did not necessarily have the most competitive terms, they actually had a banking relationship with the physician group.”

Ms. Solomiany made her remarks during the recent Revista Medical Real Estate Investment Forum 2020, held Jan. 27-29 at PGA National Resort & Spa in Palm Beach Gardens, Florida. She was part of a panel session titled, “Debt Outside the Box: Construction, Mezz & Alternative Asset Classes.” Joining Ms. Solomiany on the panel were: Natalie Sproull, VP with Capital One (NYSE: COF), as moderator; Jim Barnes, director of Healthcare Specialty Lending with Synovus Financial Corp. (NYSE: SNV); and Andrew Smith, managing director with Los Angeles-based Kayne Anderson Capital Advisors LP.

During the session, the panelists discussed some of the latest trends in healthcare real estate (HRE) financing when it comes to acquisitions as well as development deals. Part of the discussion focused on how and why certain HRE deals get done.

“When it comes to construction financing of medical projects, people are often surprised that the first few things I consider are not always financial in nature, said Mr. Barnes of Columbus, Ga.-based Synovous. “I like to look more at the expertise of the developer,” he said, “making sure that the developer really has a deep experience in delivering medical properties on time and within budget. This has become much more important recently with the trend toward greater institutional equity investment and, for the most part, the institutional investors having much less expertise in construction than the developers. Secondly, the firm looks for strong sponsorship either from a hospital system or a longstanding, stabilized private practice – something that will create an anchor within the property.”

 

Source: HREI