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2017 HEALTHCARE OUTLOOK REPORT

Our Global Healthcare Services U.S. Healthcare Real Estate Outlook 2017 covers this year's trends in consolidation, need for capital, uncertainty with healthcare reform, value based care and consumerism as well as continued investment demand for acquiring healthcare assets. The healthcare industry continues to evolve, as it responds to the twin mandates of serving a growing patient population while controlling the rapid increase in the price of the services it delivers.

Key Takeaways and Challenges  

Hospital Mergers & Acquistions

Uncertainty regarding healthcare legislation, the reimbursement model, the insured population, governmental control… One thing is certain: There will be change.

Healthcare Venture Capital Spending

Consolidation has increased demand for capital and cost reduction, while consumer demand for improved access and better patient outcomes has increased the need for innovation. 

Meical Office Building Asking Rental Rate

Regardless of uncertainty, demand for healthcare real estate investment remains at an all-time high. Interest rates have increased, and cap rates on quality assets and larger portfolios have had little adjustment and remain compressed, while assets in question have had difficulty trading. As we continue to move into a more inflationary period, we may see a rise in cap rates depending on the other legislative factors.

Employment Growth Index

The Healthcare Financial Management Association (HFMA) has identified four key trends: transition to value, consumerism, consolidation and transformative innovation. All of them will impact the need for capital, demand for change in healthcare real estate and renovation/new construction.

Construction, rental rates and absorption have been going through a transition, which is in alignment with consumer demands and trends. Rental rates continue to rise, primarily as a result of the cost of new construction.

MOB SF Under Construction

Team

Robert Bach 

Director of Research - Americas

312.698.6754 

rbach@ngkf.com

Garth Hogan 
Executive Managing Director 

Global Healthcare Services 

949.608.2115 

ghogan@ngkf.com

Todd Perman

Executive Managing Director 

Global Healthcare Services 

404.806.2510 

tperman@ngkf.com