Changing consumer preferences and advancements in healthcare technology are shifting the healthcare sector in ways that will likely unsettle the $1 trillion healthcare real estate market, according to recent analysis from BTIG.
The pandemic led to a so-called "forced adoption" of telehealth, with rates more than doubling in 2020, and experts expect the sector to continue expanding from current levels, with some saying it could grow by 10-15% annually. But BTIG says the impact on healthcare real estate, both in terms of timing and magnitude, is less clear. Healthcare entities will likely need less space for admin roles as people continue to work remotely, but the impact on clinical space is less certain. And while MOB fundamental trends have been strong during COVID, telehealth tech is still limited in many ways.
The industry experts BTIG hosted on its most recent industry analysis call "spoke more of potential efficiencies in their networks and portfolios rather than a wholesale reduction in clinical space over the next few years," the firm wrote in a recap report. The future for healthcare administrators is likely more "office hoteling," with some healthcare providers declining to renew admin space. And as telehealth continues to evolve, many systems may move away from a hub and spoke model with physicians. The trend will likely have a greater impact on suburban and urban locations, but rural locations will be far less impacted.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.