Compelling Emerging Trends
According to the Urban Land Institute, medical care, as an industry, and the real estate associated with the delivery of healthcare services, will continue to grow for two basic reason:
- it is an essential human service
- it is heavily supported by the government.
The projected mushrooming increase in demand for medical/healthcare services, and the associated real estate, is supported by a variety of long term trends and drivers :
- An aging population drives increases in demand for medical services. Those over 65 have three times as many medical office visits per year as those under 45. The oldest of the 78 million post war baby boomers turned 65 in 2012 and the youngest will reach 65 in 2029.
- By 2019, as a result of increased access to healthcare coverage and population growth, 32 million more Americans will be covered by health insurance plans. New health care laws and trends do little to increase the supply of additional facilities but increased demand for services will set the stage for healthcare related property appreciation and an opportunity for the growing demand to be met by the private sector.
- Prime has continued to monitor the net leased property sector. The Real Estate Investor forecasts demand for healthcare related real estate to expand 19 % by 2019. Over 64 million square feet is required to meet the expanded demand with roughly only 7 million square feet of new construction product in recent years.
- Both demand and supply point to increased spending on healthcare services and appreciation in value of healthcare related real estate.