As the healthcare real estate industry gears up for 2025, industry leaders are expressing cautious optimism amid lingering challenges. At a recent industry event, executives from prominent companies have shared their insights on market trends, deal activity, and the evolving landscape of medical real estate.
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Market Outlook: Cautious Optimism
The consensus among industry leaders is one of guarded positivity for the coming year. Allan Brown, partner at Prevarian Companies, encapsulated this sentiment, stating, "I am probably irrationally optimistic about 2025. It feels like we are talking to our investors and operators and they are all reasonably optimistic and some dust has settled to an extent."
This optimism is tempered by ongoing challenges, particularly in the realm of deal-making. Brown acknowledged, "It is still difficult to get deals done but there is general optimism out there."
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Deal Activity and Market Dynamics
Billy May, EVP of asset management at Montecito Medical, reported an uptick in market activity, noting, "The last quarter or so, we have seen a lot more deal activity. Sellers were willing to part with their assets. New equity came in to compete in our space." May's company is poised for significant growth, projecting around $450 million in acquisitions for the year.
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Challenges and Opportunities
Benjamin Ochs, CEO and managing partner of Anchor Health Properties, highlighted the ongoing impact of interest rates on the capital stack. "What is both a challenge and an opportunity is long-term leases and fixed rents and the cost of debt moves up and down," Ochs explained. He also pointed out the persistent issue of high construction costs, while noting a gradual acceptance of the new economic reality.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
