The Emerging Opportunity of Healthcare Real Estate Investing
- By walther.alvarez
- February 11, 2020
Over the last five years, real estate experts have noticed a steady rise in retirement related healthcare real estate investing. According to a 2019 study conducted by JLL research on medical building growth in the U.S., investors sold up to $10 billion on commercial medical properties — doubling the estimate from the 2014 statistics. This market rise is due in large part to the boomer population aging into late retirement. The shift was also spurred by the popularity of health and fitness awareness and wellness lifestyles.
Investors in healthcare real estate are expected to make promising returns with the increased demand for local healthcare facilities set up in conveniently accessible retail spaces. Experts predict that this trend is just getting started, so if you’re looking for an investment property in Orlando, then healthcare real estate may be a wise option. This is especially true if located in a strong retail corridor.
The Evolution of Healthcare Real Estate Investing
In recent years, many investors avoided investing in medical office buildings largely due to the specialized nature of their services, which called for expensive property improvements and renovations. Additionally, the healthcare services provided by the federal and state government were mostly sufficient enough to tend to the health needs of most Americans. There was less demand and the returns on such investments were not noteworthy.
However, in the last decade, the number of retirement-age Americans has skyrocketed. This generation requires extra healthcare attention that cannot be sufficiently provided by federal and state health institutions. They also realize they do not have to go to the hospital to treat all of their ailments. Now the retiring generation are instead preferring to seek medical attention closer to home and on their own terms.
Indeed, the personalized, doctor-patient intimacy provided by smaller and closer healthcare facilities is more in line with the healthy lifestyles many boomers are adopting. Furthermore, alternative treatments to diseases like cancer, diabetes, and high blood pressure are now more socially accepted and are being locally sought after by more wellness-minded retirees.
A New Opportunity for Investors
With the increased demand for nearby medical services, healthcare providers have identified the gap in the market and business is not expected to slow down any time soon. That is why wise commercial real estate investors are snatching up prime locations for medical office buildings such as:
Added Benefits of Healthcare Real Estate Investing
In addition to pulling in healthy returns, healthcare real estate owners and investors are also benefitting from the tax savings generated by the Tax Cut and Jobs Act (TCJA). Signed into law in 2017, the TCJA made changes in the tax treatment of capital expenditures, added new deductions for owners of pass-through entities, and included new rules for asset depreciation — which has also led to increased investment in real estate assets and development in the healthcare sector.
Invest With the Aid of a Commercial Real Estate Broker
If you are planning to invest in commercial healthcare real estate, having an experienced real estate broker in your corner is the best way to go. With an experienced commercial real estate broker, you can better understand the local market niche of commercial healthcare real estate and get a leading edge on where to invest to get good returns.
With over 25 years in commercial real estate brokerage, the group of professionals at Acquisition Consultants have established connections in the Central Florida area that will aid you in securing an investment property in Orlando faster and at the best rate. For more information about our dynamic services, contact us today.