Why Medical Office?

Medical office is a durable investment sector positioned to outperform other real estate investment sectors even in uncertain economic conditions. How? At its very essence, the durability of this asset class comes down to limited supply and robust demand.

Demand continues to drive healthcare from inpatient hospital settings to medical office buildings. Consider the following: patients and care providers desire healthcare to be provided in the most accessible and cost-efficient setting, a growing number of procedures can be performed outside of hospitals and patients continue to choose to seek care in outpatient settings, and demand accelerants including an aging population and increasing lifespans amplify these trends.

New medical office building supply is limited. Historically, construction in progress only accounts for 2-3% of current building inventory. As the future of healthcare delivery continues shifting to favor more modern settings, some of the medical office supply will become obsolete. Finally, medical office is typically built to suit or developed only after minimum leasing threshold is met, limiting supply of speculative construction.

DEMAND DRIVERS

10,000
People Turn 65 Every Day
The sector enjoys robust demographic tailwinds – for the last decade and forecasted through 2030, 10,000 people turn 65 every day (source: U.S. Census)
3x
65+ Population Spends Nearly 3x on Healthcare Than Adults Under 65
Per person, personal health care spending for the 65 and older population was $19,098 in 2014; almost 3 times the spending of adults under 65 ($7,153). (source: CMS)
64%
Increase in Annual Healthcare Expenditures Expected in the Next 10 Years
This is driven by the aging population and high per capita expenditures by the 65+ population. (Source: CMS)
51%
Hospital Outpatient Visits Have Increased 51%
The outpatient visits increase is since 1999 compared to 3% increase in inpatient admissions. Providers are shifting care to cost-efficient outpatient settings. (Source: AHA)

Demand continues to drive healthcare from inpatient hospital settings to medical office buildings. Consider the following: patients and care providers desire healthcare to be provided in the most accessible and cost-efficient setting, a growing number of procedures can be performed outside of hospitals and patients continue to choose to seek care in outpatient settings, and demand accelerants including an aging population and increasing lifespans amplify these trends.

New medical office building supply is limited. Historically, construction in progress only accounts for 2-3% of current building inventory. As the future of healthcare delivery continues shifting to favor more modern settings, some of the medical office supply will become obsolete. Finally, medical office is typically built to suit or developed only after minimum leasing threshold is met, limiting supply of speculative construction.

DEMAND DRIVERS

10,000
People Turn 65 Every Day
The sector enjoys robust demographic tailwinds – for the last decade and forecasted through 2030, 10,000 people turn 65 every day (source: U.S. Census)
3x
65+ Population Spends Nearly 3x on Healthcare Than Adults Under 65
Per person, personal health care spending for the 65 and older population was $19,098 in 2014; almost 3 times the spending of adults under 65 ($7,153). (source: CMS)
64%
Increase in Annual Healthcare Expenditures Expected in the Next 10 Years
This is driven by the aging population and high per capital expenditures by the 65+ population. (Source: CMS)
51%
Hospital Outpatient Visits Have Increased 51%
The outpatient visits increase is since 1999 compared to 3% increase in inpatient admissions. Providers are shifting care to cost-efficient outpatient settings. (Source: AHA)

Acquisition Criteria

Property Type

Best-in-class medical office buildings, including outpatient care facilities, physician group practice clinics, and ambulatory surgery centers

Geography

Locations in top U.S. growth markets characterized by durable demand generators such as major universities, diverse corporate sectors, and magnetic culture

Purchase Price

Approximately $10 million minimum investment size, no maximum purchase price - individual buildings or portfolios

Risk Profile

Stabilized tenancy, 80% minimum occupancy, 5-year minimum weighted average remaining lease term, supportive of delivering increasing cash flows over time

Proximity to Campus

Strong medical locations may be on the campus of acute care hospitals, adjacent to a campus, or in community-based medical destinations

Investment Characteristics

Multi-specialty, multi-tenant buildings, anchored by established health providers with a leading market share and a path for growth

Building Design

Buildings designed to enhance the experience of the healthcare provider, the patient, and family – and ultimately to help improve health outcomes

Facility Objective

Adaptable to the complex challenges of modern healthcare and accommodative to the next generation of healthcare solutions

Investment Track Record Since 2004

Along with her respective teams, Care’s Founder and CEO, Ann Atkinson, has closed 179 separately negotiated transactions totaling $5.9 Billion in gross proceeds.

$4.7 Billion Acquisitions

219 buildings
63 separate transactions
Predominantly medical office buildings

$521 Million Dispositions

34 buildings
9 separate transactions
Predominantly medical office buildings

$655 Million Brokerage Transactions

107 separate transactions
Office and medical office buildings

Properties