After the initial shock of the fallout of the COVID-19 pandemic, it looks as if the healthcare industry, and subsequently the healthcare real estate (HRE) sector, is getting back on track.
“We collected 96 percent of our rents (in April), but the providers and our tenants were really scared,” said Chip Conk, CEO and founder of Nashville, Tenn.-based Montecito Medical Real Estate, which has a portfolio of about 3 million square feet of medical office space under management. “They didn’t know anything about what was really going to happen. However, by last week, we have seen from our tenants, I think, a little bit of stabilization in terms of where they are psychologically, and we actually had some requests that got totally paid back. Overall, the sector, at least our tenants, seems to be stable … COVID could come back, but overall we’re feeling a lot better than we were 90 days ago, as a company.”
As a result of such stability in the HRE sector, demand and pricing remain quite strong for medical office buildings (MOBs), according to panelists who took part in a June 10 webinar exploring how the sector is faring during the pandemic.
Sponsored by Atlanta-based Interface Conference Group, part of France Media Inc., the event was titled, “State of the Industry: What’s the Outlook for 2020 from an Investment, Development and Leasing/Operations Perspective?”
In addition to Mr. Conk, the discussion, moderated by Mindy Berman, senior managing director and an MOB sales broker with Jones Lang LaSalle Inc. (NYSE: JLL), also included: Robert Hull, executive VP with Nashville-based Healthcare Realty Trust (NYSE: HR); and Peter Westmeyer, president and managing principal with Chicago-based MBRE Healthcare.
As noted, the strength of the MOB sector amid the fallout from the pandemic has kept the product type on the radar screens of many investors, according to the panelists, whose firms are among those that have remained as active as possible in the market.
Source: HREI
