Capital Hunts For Medical CRE
As healthcare systems evaluate space needs, theres plenty of money out there, says our panel of experts at last weeks Bisnow Healthcare Real Estate Summit. Newmark Grubb Knight Franks executive managing director Todd Perman says real estate investors are hungry for healthcare properties. But theres not a huge supply to buy. Theres a lot of gunpowder on the sidelines, Todd told our audienceat the Westin Buckhead. (Maybe they can infill all the old Border's locations and do all their vaccinations in the music section.) Todd says 2013 saw more than $22B in capital raised for MOB and healthcare facility investments.
Bull Realty partner Paul Zeman says we could be on track for $7B in transactions this year, topping $5B last year. And interest for off-campus medical properties is heightening--and shown in cap rates, which are compressing into the low 7% range. And with rental rates increases this year, Paul says, I think everything is trending in the right direction.
Rendina Coss EVP Todd Varney says with the cost of capital still low, he sees more hospitals and healthcare system reevaluating development projects, especially off-campus projects. Were seeing a lot of projects that were put on the shelves being reevaluated, Todd says. (Like that book you never had time to read, but now the movie is coming out, so you have to.)