'Tidal Wave' of Equity Expected to Hit Healthcare Market

Deal flow is slowing in the healthcare sector – but a “tidal wave” of equity will hit soon the market, according to one executive. 

“With all the money raised on the sidelines, we expect to see an ebb over the next 6 to 12 months and eventual tidal wave flow of equity into the market as distressed assets and CMBS resets hit a wall over the next few years,” says Paul Mullin, Co-Founder and Principal – Flatiron Development Group, in an exclusive interview with GlobeSt ahead of next month’s healthcare conference in Scottsdale, Ariz., where he’ll participate in a panel on the future of healthcare.

Mullin says the sector remains incredibly strong and resilient heading into 2023 as boomers age into a greater range of healthcare service, buoying demand.

“The fundamentals of healthcare commercial real estate and particularly the senior housing and services sector are heading into peak valuations and returns due to the obvious demographic hockey stick trend of boomers starting to turn 80+ in 2026,” he says. Developers are also adapting to changing needs of medical care delivery facilities, he says: Flatiron, for example, has partnered with DELOS to improve healthcare environments using the WELL building standards and rating system.

“These wellness solutions and building systems create healthier spaces,” he says. “Improved environmental and green space designed and developed using the WELL standard lead to healthier outcomes for our patients and residents.”

Mullin recognizes that a shortage of family support, caregivers, qualified administrators, medical professionals and labor in general will be the biggest challenge to the sector. Until a “reasonable immigration solution” is negotiated by legislators, he says, the industry will need to take the initiative to focus on and support public and private organizations like the Vision Centre, which he says is committed to creating 25 university and college healthcare programs and more than 1000 paid internships with senior housing and care and service providers by 2025.

Check back soon for more insights from Mullin and his fellow panelists at next month’s GlobeSt Healthcare conference in Scottsdale, Ariz.