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Medical RE Seen as 'Perfect Recession Play'

NEW YORK CITY-Healthcare real estate can mean steady cash flow but requires careful attention to location and management, Noyack Medical's Follini tells a RELA audience.

By Paul Bubny | Updated on April 14, 2009

NEW YORK CITY-Cash flow is king in healthcare-related properties but the asset class requires astute management, Noyack Medical Partners’ C.J. Follini told a Real Estate Lenders Association gathering Tuesday morning.

“Doctors need a lot of attention” as tenants, said Follini, managing principal of Noyack, a locally-based healthcare real estate investment and operating company. “It’s when they don’t receive that attention that you start to have trouble.” With that said, Follini extolled health care real estate as a largely recession-proof oasis of stability and steady growth in a challenging climate.

The growth in the healthcare sector, expected to continue for the foreseeable future as the global population ages, is certainly a major factor in the strength of this asset class. Employment in physicians’ offices has grown 4.8% annually since 1972, compared to 1.8% annual growth in overall private employment, while the US population–ages 65 and over–is expected to more than double to 87 million by 2050.

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