Many factors are contributing to the record growth of medical office construction and absorption rates, and the expansion of this sector doesn’t look like its going to slow down anytime soon. As we’ve covered in previous articles of this newsletter, the aging baby boomer population is one large contributing factor to the continued expected high demand for medical real estate. By 2020, individuals 65 years or older are expected to number over 56 million. As this number grows, so does the need for physician services and accompanying need for medical office space and other healthcare real estate.
Another sign that medical real estate will continue to be an attractive investment in the coming years is that this sector’s fundamentals remain stable. Occupancy rates, typically longer-term leases, less turnover of space and a growing need for the tenant’s services occupying those spaces are all reasons why this sector could experience consistent growth for several years or even decades to come.
