Those that have read about recent age demographics in the U.S. know that the population is aging….quickly. As a matter of fact, the oldest of the 78 million post-World War II baby boomers began reaching age 65 in 2012, whereas the youngest of that age group will reach 65 in 2029. Those in the 65 to 74 years of age range as a population will peak in approximately 20 years, as shown in the graph below. In its Outlook for Health Care report, the Urban Land Institute stated that “those over 65 years of age have three times as many office visits per year as people under 45…” and that “(t)he government estimates that Medicare and Medicaid expenses will leap from 6.4 percent of gross domestic product (GDP) this year to 10.7 percent in 2029.”
The demand for medical office buildings is expected in increase 19 percent by 2019, in large part because of population growth and new healthcare laws. Because MOBs have shown much less volatility exhibited by more stability in their capitalization and vacancy rates in comparison to other types of commercial real estate such as retail malls and office buildings, and residential real estate, it is projected that MOBs will not be faced with continuing excess capacity in future years like these other real estate sectors have been dealing with.
Source:
http://americas.uli.org/wp-content/uploads/sites/125/2012/06/Shilling-Healthcare-Outlook.ashx_.pdf
