Medical Office Fundamentals Strengthen, Despite COVID-19 Disruptions
The medical office sector continues to go from strength
to strength, setting record highs for asking rents, sales
volume and pricing in 2021. Demand is outpacing
supply, vacancy remains tight and cap rates are compressing. Development activity is picking
up, reflecting confidence in the sector.
This performance is particularly impressive given the continued impact of COVID-19 on the healthcare industry and society in general. Looking forward, we have identified several key themes the healthcare industry is facing over the year ahead:
- COVID-19: The continued Federal response to the pandemic and its path going forward.
- Staffing Shortages: Burnout among healthcare professionals is rife with an increasing number of workers leaving the industry.
- Supply-Chain Challenges: Bottlenecks and shortages persist with the Russia-Ukraine conflict potentially exacerbating the situation.
- Telehealth: How will telehealth services shift post-pandemic and will Federal funding continue?
- Digital Health: Venture capital (VC) funding continues to set new records. What are some of the possible innovations going forward?
- The Economy: How will record inflation impact the key stakeholders in the healthcare sector?
- Policy Outlook: How long will the national state of emergency continue and what are the implications once it ends?
Each of these issues is explored in detail in the report, after first reviewing 2021 in terms of both the impact of COVID-19 and the performance of healthcare real estate and medical office properties in particular.