Real estate is the latest piece of the nation’s healthcare puzzle that’s expected to benefit from a large number of Americans getting ready to hit their senior citizen years.
That’s the word from a report by Santa Ana-based Grubb & Ellis Co.
“Aging baby boomers and their increasing demand for medical services will fuel demand for healthcare properties over the next decade,” Grubb & Ellis said in the report.
The report cited U.S. Census Bureau figures showing the 65-and-over age group is projected to grow 36% between 2010 and 2020, compared with 9% for the general population.
Seniors are generally greater consumers of healthcare and visit doctors more often. Doctors are the main tenants for medical office space.
Other highlights from the report from a national perspective:
n Demand is high for medical office space. Grubb & Ellis’ figures show that asking rental rates for medical offices grew an average of 2.8% per year from 2000 to 2007. By contrast, rents for traditional offices only grew an average of 1.3%.
n On the building front, monthly spending on healthcare construction is 20% higher than a year ago, according to Reed Construction Data, a Norcross, Ga.-based research firm. Overall healthcare construction should be up 14% this year, according to Reed.
Where they are building: Illinois, Texas, California and retiree-haven Florida accounted for a third of healthcare construction starts last year.
“The looming economic slowdown is likely to make the healthcare property sector, with its non-cyclical growth profile, look relatively more attractive compared to other property sectors,” said Robert Bach, Grubb & Ellis’ chief economist and the report’s author.
Other parts of the real estate market, according to Bach, “will be affected to differing degrees by the flattening economy.”
Grubb & Ellis, meanwhile, has been active in the healthcare deal market through some of its business units.
Earlier this month, its Realty Investors unit bought Jacksonville Medical Plaza in Jacksonville, Fla., on behalf of tenant in common investors. The plaza is made up of two office buildings with a total of 132,000 square feet in space.
Meanwhile, Grubb & Ellis’ Healthcare REIT made a few deals.
At the beginning of April, it bought Vista Professional Center, a medical office complex in Lakeland, Fla. Vista Professional Center is made up of four office buildings totaling 32,000 square feet. Earlier, it bought a 54,000-square-foot medical building in Houston.
The real estate investment trust also bought a four-building, 530-bed portfolio made up of three nursing homes and an assisted living facility in four separate Texas cities: Arlington, Galveston, Port Arthur and Texas City.
No prices were released for any of the deals.
InSight Names Chief Executive
InSight Health Services Holdings Inc., a Lake Forest-based operator of medical imaging centers, named Kip Hallman as its new chief executive and president. Hallman was previously InSight’s chief strategy officer and interim chief operating officer.
Hallman, a 49-year-old Solana Beach resident, joined InSight in 2005, initially as its executive vice president and chief strategy officer.
He replaces Richard Nevins, who had been InSight’s acting chief executive since October. Nevins, who stepped up after former chief executive Bret Jorgensen left the company, remains on InSight’s board of directors.
Jorgensen left InSight in November after serving as its chief executive for two years, including seeing it through bankruptcy reorganization last year. Under that plan, InSight traded 90% of its common stock to bondholders, who in turn forgave $195 million of debt due in 2011.
Bits and Pieces:
Allergan Inc., the Irvine-based maker of eye drugs, Botox and medical cosmetics, launched a public awareness campaign with the League of Women Voters and actress Virginia Madsen, an Allergan celebrity spokeswoman. The campaign is called “Freedom of Expression through Film” and focuses on ways people express themselves; perspectives on “aging gracefully” are part of the effort Irvine device maker Masimo Inc. said Japanese regulators cleared its PVI measurement, which is included in its pulse oximetry device. Doctors use PVI to determine a patient’s internal fluid volumes and monitor cardiac output in a non-invasive manner Irvine-based NeoMatrix Inc. said that it’s placed its Halo test for detecting a woman’s risk for developing breast cancer in 14 OC physicians’ offices St. Joseph Hospital-Orange named Lawrence Wagman, a surgeon and researcher specializing in breast and liver cancers, as the executive medical director of the St. Joseph Hospital Cancer Institute and Cancer Center. Wagman was most recently at City of Hope.
