As for vacancy, panelist Smelter said that medical office vacancy rates hit a low this year and finally broke under 8% nationally. Last year, traditional professional office was 14.9%. medical office is a real stable industry with a lot of new buyers and new growth and demand hasn't kept up.

Relative to office, David Lynn, Ph.D., CEO and chairman of Everest Medical Core Properties, said that it is still a relatively inexpensive asset class. But he noted that it isn't priced as efficiently as office because it isn't widely traded. “We still have room to compress in medical office.”

Erik Tellefson, managing director at Capital One Healthcare, said that 2016 was a big year for leveraged finance. “Going forward, right now, our spreads haven't changed and our lending platform stays the same.” Over the past few weeks, he said that his firm has been underwriting to a steeper yield curve. “As of now, really no changes for the leveraged buyer if they are using us, but if interest rates go up, we will go towards fixed-rate deals.”

In looking at assets, Winer said to look where you know you can grow NOI growth through asset management efforts. “You should always be thinking about the future and what's to come.”

In talking about President-elect Trump's pledge to “repeal and replace Obamacare,” sources agreed that while they can't predict the future, no one is leaving the business.

Not that much is known at this point in time, said Winer. “A macro question before we go through this is what we are hearing from health systems. The big fear is that providers won't commit capital because they can't plan. That is always a risk. But we have not, in discussions with the health systems that we do business with, noticed any change in posture in terms of their plans specific to M&A and growth and acquisition of physician practices. It seems like full speed ahead in the couple weeks we have had so far.”

Lynn said that the ACA is 2.5 years old. “There was good demand and growing demand before the ACA. The demands are about more healthcare, more off campus, more technology enabled.” He continued to say that it doesn't really affect his business. “We have mainly been in the affluent suburbs and the ACA isn't really our client. It likely won't affect hospital plans.”

So let's say we lose 20 million insured? Stefan Oh, EVP of acquisitions at Griffin-American Healthcare REIT III, said that the demographic story is still there and that is going to continue.

Smelter agreed, noting that he doesn't see how the supply/demand will change much. “Potential changes with the ACA doesn't change the decision making of developers, or the demand in the space.”

And Winer added that “the types of projects that will be built will be the same even if things change with the ACA.”

The only thing or variable that can cause problems is the cost of capital, explained Smelter.

Panelist Darryl Freling, managing principal of MedProperties Holding LLC, said that the one thing that is constant in the healthcare business is the aging demographics and the growth of service in the sector. “Underwriting healthcare tenants and the business model has always been complicated, so what I am hearing today is that the industry is sound, demographic drivers haven't changed, the election will have an impact on the business model for the delivery of healthcare, but the underwriting and business model for providers is already complicated and it will continue to be that way. I don't think complication is a bad thing in this business, if anything it will make the barriers to entry higher.”

SCOTTSDALE, AZ—Last year was the pinnacle year. That was according to John Smelter, senior director of the healthcare real estate group at Marcus & Millichap, who recently spoke at the RealShare Healthcare Real Estate conference here. And while stats aren't out for the entire year, he said that in the healthcare space, since the first half was very close to last year's numbers, he anticipates the sales dollar volume will be lower than 2015.

“Normally the second half of the year is the largest quarter, but that didn't happen last year and it doesn't seem to be happening this year,” he said. “Average deal size has gone up significantly at $17.2 million.”

And buyers in the space have also changed, he said. “The private capital has been leading the way and it dropped off a little bit. REITs and private capital totaled 69%.”

Panelist Jonathan Winer, senior managing director and chief investment officer at Seavest Investment Group, talked further about the numbers in the space. Looking at a graph, he said that the Q3 2016 spread between capitalization rates and the 10-year treasury yield is wider than its 15-year average and larger than the historically tight spreads that preceded the last market cycle peak in 2007. “A simple conclusion you can make from this graph is that interest rates can go up a bit further… it helps think about what it means for cap rates in the business as interest rates rise.”

As for vacancy, panelist Smelter said that medical office vacancy rates hit a low this year and finally broke under 8% nationally. Last year, traditional professional office was 14.9%. medical office is a real stable industry with a lot of new buyers and new growth and demand hasn't kept up.

Relative to office, David Lynn, Ph.D., CEO and chairman of Everest Medical Core Properties, said that it is still a relatively inexpensive asset class. But he noted that it isn't priced as efficiently as office because it isn't widely traded. “We still have room to compress in medical office.”

Erik Tellefson, managing director at Capital One Healthcare, said that 2016 was a big year for leveraged finance. “Going forward, right now, our spreads haven't changed and our lending platform stays the same.” Over the past few weeks, he said that his firm has been underwriting to a steeper yield curve. “As of now, really no changes for the leveraged buyer if they are using us, but if interest rates go up, we will go towards fixed-rate deals.”

In looking at assets, Winer said to look where you know you can grow NOI growth through asset management efforts. “You should always be thinking about the future and what's to come.”

In talking about President-elect Trump's pledge to “repeal and replace Obamacare,” sources agreed that while they can't predict the future, no one is leaving the business.

Not that much is known at this point in time, said Winer. “A macro question before we go through this is what we are hearing from health systems. The big fear is that providers won't commit capital because they can't plan. That is always a risk. But we have not, in discussions with the health systems that we do business with, noticed any change in posture in terms of their plans specific to M&A and growth and acquisition of physician practices. It seems like full speed ahead in the couple weeks we have had so far.”

Lynn said that the ACA is 2.5 years old. “There was good demand and growing demand before the ACA. The demands are about more healthcare, more off campus, more technology enabled.” He continued to say that it doesn't really affect his business. “We have mainly been in the affluent suburbs and the ACA isn't really our client. It likely won't affect hospital plans.”

So let's say we lose 20 million insured? Stefan Oh, EVP of acquisitions at Griffin-American Healthcare REIT III, said that the demographic story is still there and that is going to continue.

Smelter agreed, noting that he doesn't see how the supply/demand will change much. “Potential changes with the ACA doesn't change the decision making of developers, or the demand in the space.”

And Winer added that “the types of projects that will be built will be the same even if things change with the ACA.”

The only thing or variable that can cause problems is the cost of capital, explained Smelter.

Panelist Darryl Freling, managing principal of MedProperties Holding LLC, said that the one thing that is constant in the healthcare business is the aging demographics and the growth of service in the sector. “Underwriting healthcare tenants and the business model has always been complicated, so what I am hearing today is that the industry is sound, demographic drivers haven't changed, the election will have an impact on the business model for the delivery of healthcare, but the underwriting and business model for providers is already complicated and it will continue to be that way. I don't think complication is a bad thing in this business, if anything it will make the barriers to entry higher.”