After attending two conferences focusing on two different healthcare real estate sectors, it is all about capital.
Having just returned from two different conferences in Florida, the one conclusion I can draw from both of them is that there still is way too much capital looking for yield. One, the Revista-sponsored medical real estate conference, was mostly focused on the medical office building market, which transacted more than $13 billion in investments last year. Who would have thought?
The other was the American Seniors Housing Association’s annual meeting, which had record attendance with a lot of “deal talk” going on. One industry veteran told me he was only talking to architects and builders at the conference to get a true gauge on what was happening with development. Based on his conversations, 2018 will be the same or even more active than in 2017.
Given the industry headwinds, why? Because capital needs to be put to work, and there are few investments that appear to have such a long-term demand associated with them. But they have to remember, a lot can change in the long term, including technology, tastes, designs, regulations and affordability. Nothing is static, especially what tomorrow’s 85-year old will want.