3 Principles Shaping The Current Healthcare Real Estate Market

Despite some of the challenges many healthcare providers are facing as they navigate through COVID-19, there is good news about what we are seeing in markets across the country. We are 100% committed to protecting and advocating for practice owners, and doing all we can to help you Maximize Your Profitability Through Real Estate®!

Here are three principles we believe will help shape the healthcare and real estate landscape moving forward.

1. Most Landlords Are Working With Tenants Through COVID

Landlords don’t want vacancies, especially healthcare spaces that wouldn’t have occurred outside of COVID. The cost of releasing vacant space, waiting for the next tenant to show up, and all the associated expenses of evicting a tenant are dramatically higher than simply working with quality tenants to get through this challenge. While some landlords are easier to work with than others, the majority are doing their best to get through this issue with their tenants.

2. The Healthcare Industry Is Only Going To Get Stronger

While many industries are going to struggle getting back up and running, healthcare is one of the most resilient industries in the country and has weathered the last 5 economic recessions / market corrections at the highest rate. While we don’t personally see this current ‘forced pause’ looking anything like the last several market corrections, we do believe healthcare providers will bounce back as fast as any industry.

3. The Commercial Real Estate Market Will Most Likely Soften

Many traditional companies are going to reel-back and cut overhead by not bringing back as many employees, reducing the amount of office space they need as well as eliminating excess locations. This should result in the commercial real estate market softening; which in turn will cause lease rates to go down, concessions to increase, and also has the possibility to reduce construction costs as well.