Remedy Medical Reports Surge in Activity Amid Interest Rate Cuts

From even one Federal Reserve cut some real estate firms are taking note of increased activity. One of those is Remedy Medical Properties, which operates and manages more than 33 million square feet of real estate and claims to be the largest private owner of healthcare assets in the nation.

David Martin, executive vice president, and managing director of development for the Chicago-based firm, told GlobeSt. that while some CRE players are in wait-and-see mode still, his calendar has been flooding with meetings, as of late.

“Beyond that, we’ve seen several projects that have been on the sidelines wake up and come back. There’s been a bit of activity of late,” said Martin, who will be a speaker at GlobeSt.’s annual Healthcare conference, which will take place from December 2-3 in Scottsdale.

“Quite frankly, I think potentially having lower interest rates probably at this point has a lot of people re-examining some projects to see whether they might make sense now when they didn’t pencil out a few months ago or a year ago.”

COLORADO AT REMEDY’S FOREFRONT

Where is the deal volume picking up exactly? Remedy operates in 44 states across the country but is seeing things pick up in a few Sunbelt states, most notably. This includes Colorado, which “continues to be a place of a lot of activity,” according to Martin.

“We have two active construction projects right now [in the region],” he said.

“We [will] have a third. We just closed on buying the ground. We’ll be breaking ground in another 30-45 days on the third project out there. ”

Georgia and Florida are two other states where Remedy is active. Outside of the Sunbelt, Martin said the company has “ several things happening in Massachusetts.”

But overall, across the nation, Martin doesn’t see any particular regional slowdowns. He describes other markets that might not be booming for the firm like Colorado as being “steady.” And given Remedy’s large national presence, there aren’t many states in the country where Martin isn’t having conversations.

NOT LETTING UP EVEN WITH HIGH INTEREST RATES

While Remedy isn’t completely immune from the negative impact of high interest rates – that hasn’t spooked the firm from adding to its portfolio this year and finding the right opportunities. Martin estimates the company has acquired 29 properties in 2024. That puts it on track to exceed $1 billion in purchases this year, which is what the company typically does annually. This is thanks to Remedy’s strong balance sheet.

“We’ve actually picked up some projects where other developers were not able to close the deal,” Martin noted.

“We really don’t have any capital constraints.  We have discretionary authority. We can make transactions occur when others might not be able to do so as easily.”

HEALTHCARE POISED TO BOOM REGARDLESS

But for the rest of the year, there will be a multitude of uncertainties ahead for CRE players. Where will interest rates wind up and what will happen this election cycle?

Regardless, Martin is keeping what he calls a “robust” view of the healthcare space. This is because Remedy’s tenants will need cost-effective space as they move into more of an ambulatory setting, as opposed to traditional hospital properties.

“The macro market, the population is aging, the demands on the health systems continue to grow and expand, and it may make for some curious math to finally get to where they have to go,” a bullish Martin explained.

“But eventually, the straw will break the camel’s back on [the] need for competitive threats and you know it – it will happen one way or the other.”