What is Healthcare Real Estate?

Healthcare real estate is a sub-market inside of the overall real estate space as a whole. Pushed on by Obamacare, healthcare real estate refers to the sale, leasing, renting etc of buildings, offices, and campuses for medical purposes. Typically this can include hospital space, campuses of medical schools, dorms for medical students and can be either owned by private or public services.

With the changing age of the population starting to favor those over 65, the industry will only be going up, as trends indicate almost 25% of the population will be in need of some form of medical assistance by the end of 2050.

Differences Compared to “Regular” Real Estate

Health care real estate differs from regular real estate in a number of ways. First and foremost, realtors must cater to the specialized needs that hospitals have, which means that everything from air filtration, to maintenance must be done with sterilization in mind. Also, space for large equipment such as MRI machines and X-rays must be accounted for, as well as spots for smaller things like waiting room benches, nurses stations, and changeable hospital boards.

Medical waste rooms, spaces for computers, equipment, waiting rooms, operating rooms, intake rooms, bathrooms, cafeteria, and staff office areas must all be accounted for as well, making a medical building much larger than a typical home (even an upscale 4 or 5 bedroom one). This means that while clients may be fewer, payouts will be much higher for healthcare real estate agents.

Clientele that are searching for a healthcare real estate agent will typically always be a higher paying client for the agent. This is due both in part to the size needed for most medical buildings, but also because of the amount of revenue that is generated from them.

Is it a Growing Industry?

The big boom in healthcare real estate occurred in 2008 and can be attributed to several factors. The United States population as a whole began to require more medical services as it aged, and in 2004, there was a record 36.3 million people aged 65 or older. That number accounted for 12% of the total population at the time, and according to the Census, there will be 86 million people 65 or older by 2050 (21% of the population). Based on these numbers alone, it is clear that the need for healthcare real estate will only rise in the next couple of years.

Technological advances have increasingly enabled procedures to be performed outside the confines of a hospital. This means that private surgeons and doctors are looking for reliable sources to purchase real estate from. Typically private doctors make much more money that those who work for hospitals, so that will also increase the demand for alternate medical spaces.