Healthcare real estate investment has been hit hard by the COVID-19 pandemic, so there are some things investors should know before planning their next foray into the sector.
1. THE RECOVERY MAY TAKE SOME TIME
Healthcare real estate’s full recovery may be impacted by changing patterns of use. For instance, care homes and senior care facilities, which have been hit hard by the pandemic, may not return to full occupancy straight away, hampering demand for that kind of real estate in particular. Investors may want to wait before diving straight in.
2. TELEHEALTH IS GOING TO SHAKE THINGS UP
Telehealth—remote healthcare services—could drive healthcare real estate growth. As healthcare technology and video call services become more sophisticated, doctors will be able to perform tasks remotely and over Zoom more effectively even after the pandemic. It will only ever be a small segment of the market, but healthcare real estate will adjust to accommodate telehealth, with medical office buildings designed around remote healthcare.
3. LIFE SCIENCES MAY BE THE NEXT BIG THING FOR REAL ESTATE INVESTORS
Life sciences, covering everything from biotechnology to pharmaceuticals and biomedical technologies, will experience greater interest after the pandemic. The supply of life science properties is currently relatively limited, so there’ll be plenty of opportunities to invest in more office and laboratory spaces in the near future.
4. EXPECT CONSOLIDATION
With many property owners struggling during the pandemic, some of the larger healthcare real estate owners will have been opportunistically acquiring more properties over the last twelve months. Some of the owners who have benefited, therefore, may delay selling their new properties in order to maximise their profits, waiting instead for the market to rebound.
5. CONVENIENCE IS KEY
The pandemic and the rise of telehealth has driven a demand among patients for greater convenience. Any expansion undertaken by healthcare providers may prioritise smaller, accessible offices in high traffic areas, perhaps representing a move away from the traditional hospital “campus” model.
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