Healthcare Real Estate News – November 2012

Healthcare Shifts Will Alter Space Use The healthcare industry is changing, and it will have significant impacts on the real estate side of the business. Efficiency, flexibility and costs were the major topics of conversation for the 350-plus healthcare professionals and healthcare real estate experts who gathered at the Four Seasons Resort here today for the fifth annual RealShare Medical Office Buildings conference.

Medical Office Sector Enters Transitional Period Industry insiders believe that as large hospitals buy up smaller practices, it will free up small medical space in the market. Others think that due to the influx of new patients into the medical system under the health care reform, there will be a greater demand for more medical office space.  However it plays out, it is estimated that by 2020, hospital systems will have acquired more than 90 percent of all private practices.

Obamacare: Now What for CRE? The healthcare industry has something it didn’t last week: more certainty.  Now that the election’s a done deal, it’s unlikely the Affordable Care Act will go away. That means major healthcare providers will be more inclined to kick off new development and consolidation, according to our expert healthcare execs, real estate developers, and architects, who also pointed to the continuing wave of consolidation and changes in the way healthcare is delivered to be more efficient with tighter cost control.

Flaherty: Health Care Sector Facing Changes Jay Flaherty, chairman and CEO of HCP Inc. (NYSE: HCP), joined for a CEO Spotlight video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT.  HCP invests in real estate serving the health care industry. The firm acquires, develops, leases, sells and manages health care real estate and is a capital partner to health care providers.  HCP’s “5×5” business model includes investments across five diversified health care segments and five investment products.

Ventas Focused on Demographics, Dividends Debra Cafaro, chairman, president and CEO of Ventas Inc. (NYSE: VTR), joined for a video interview at REITWorld 2012: NAREIT’s Annual Convention at the Manchester Grand Hyatt in San Diego.  Ventas Inc. is a health care REIT that has more than 1,400 properties in 46 states, the District of Columbia and 2 Canadian provinces. They include assets in senior housing, medical office buildings, skilled nursing facilities and hospitals. The company’s $26 billion dollar senior housing and health care portfolio is primarily private pay focused.

Obamacare Impact Overhyped, But Healthcare Trends Aren’t As much controversy as it stirred up before the election, healthcare reform won’t have as much of an impact on the healthcare real estate industry as the hype made it seem. Rather, it’s the innate changes occurring in the medical industry itself that are driving the trends in space usage.  Simply put, said Gary McKitterick, a partner with Allen Matkins, “We have to change. We cannot sustain what’s going on in healthcare right now. Space is cost, cost must change. All costs must come down.”