Hot Hot Healthcare
Healthcare real estate pricing continues to break pre-crash records and the Affordable Care Act is still hot topic du jour. (Does this mean we're all getting sicker?) That’s why we’re hosting Bisnow’s 3rd Annual Chicago Healthcare Real Estate Summit later this month. We caught up with Blueprint Healthcare Real Estate Advisors managing director Jacob Gehl, our moderator, for the latest.
The name of the game for REITs is still consolidation, Jacob (pink tie above, to the left of the one and only Matisyahu) tells us, like Ventas’ recent major acquisition of American Realty Capital Healthcare Trust for $2.6B. Since a giant like Ventas won’t necessarily do one-off deals, it makes sense for private REITs to aggregate and bring a larger portfolio to the table (causing cap rate compression), he says. M&A will also continue on the hospital side, because size matters when it comes to the ACA. (How you use it is also important.) Now that the focus is managed care, hospitals can only compete and maintain profitability by being big and having a critical mass, he says.
Healthcare’s also undergoing a retail-ization as it enters shopping centers and strip malls, because “bringing somebody into the mothership is more expensive than putting doctors in an outpatient setting,” Jacob says (we say the same things about aliens), and retail landlords have welcomed it as a way to soak up vacancy. It’s indicative of the healthcare system’s biggest challenge (and the premise of the ACA), which is trying to serve more people without substantially expanding the amount of resources. Financial constraints have also spurred sale/leasebacks, Jacob says, to help hospitals fund growth and M&A.
Blueprint is celebrating its one-year anniversary as a company with some record-setting deals. (Who wouldn't bet on 90M graying Baby Boomers?) A recent nursing home deal in Florida came in at $150k/bed, the highest price ever paid in the state, and a $35M sale of an assisted living portfolio downstate to American Realty Capital was just as eye-popping at $140k/bed. It’s been an incredibly busy year for Jacob. In addition to launching the company (and boxing three days a week), he had his second child and helped his wife launch clothing company Monica & Andy, an offshoot of Bonobos meant for kids. His son, Zev (above), has been a model for the brand, and the company just opened up shop at Halsted and Dickens. Get your event tix here.
