Jones Lang LaSalle Predicts Promise in Healthcare Real Estate

Despite uncertainty over healthcare reform, the healthcare real estate market is showing signs of life and promise according to a report by Jones Lang LaSalle included in its “Healthcare Real Estate Spring Outlook” [1]. Peter Bulgarelli, JLL’s SEO of its Healthcare Solutions Group, predicts that 32 million people will “join the ranks of the insured by 2014,” and stated that “forward-thinking healthcare systems understand they must act now” in order to prepare to address the needs of these individuals. This includes the development of medical office buildings and ambulatory care facilities. Many healthcare systems shut down much new development in recent years thanks to uncertainty about the real estate market and to confusion and concern over healthcare legislation. However, “restoration of economic stability for hospitals along with demographic growth and the push to outpatient services is launching new development activity,” reported Mindy Berman, JLL managing director for the Healthcare Capital Markets group. Analysts also believe that if plans for healthcare legislation are not changed in the near future, many smaller practices and, indeed, many large hospitals will seek to consolidate to maximize services while minimizing costs. This will lead to a need for larger complexes and greater infrastructure [2].

Berman also predicts a rise in creative, long-term lease strategies to help healthcare providers cope with difficulties obtaining credit. This situation appears to be ideal for real estate investors to get involved. Are you interested in investing in the healthcare real estate industry?

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