The other powerful trends are the U.S. Baby Boomers—80 million of them.
office space in the Baltimore metro area. The market is 88.3 percent occupied at the moment, with only 1.2 million square feet of vacant space, including newly built facilities. New construction has become a necessity, as medical office tenants are now looking for quality space to deliver their services.” We wouldn’t be surprised if Johns Hop- kins Hospital and University of Maryland Medical System demanded a greater amount of space along the way as well. While there are startling assessments that commercial real estate will slow, it’s not the time to panic. The opportunities afforded us from capital inflows and ad- vancements in health care demand ensure any price declines will be short-lived. •
in 2013. That was the “second-highest total in 13 years.” Second, “People over the age of 60 visit a doctor’s office twice as often as does the general population and are prescribed four times the number of prescription medications,” notes commercial real estate services firm Cassidy Turley. “In- vestors are clearly savvy to these trends. While sales volume for nearly all CRE product types is still hovering at 2004 levels, sales of medical office buildings posted a record high in 2012.” Third, as millions of Americans pick up health insurance, “The demand for med- ical office buildings will increase by 19 percent by 2019,” according to the Urban Land Institute. “The need for an estimat- ed 64 million square feet of additional medical office building (MOB) space in the coming decade dwarfs the 6.3 million square feet that will deliver this year.” If we look at Maryland, for exam- ple, Baltimore’s growing population is demanding more medical services, as re- ported by Cassidy Turley. “There are cur- rently 10.1 million square feet of medical
‘TSUNAMI OF SPENDING’ ON THE HORIZON “We face a tsunami of spending due primarily to the retirement of the Baby Boom generation and rising health care costs,” said David Walker, comptroller general of the Government Account- ability Office, as quoted by Fox News. “We’re going to have tens of thousands of Baby Boomers retiring every week over the next decade or so.” That works out to more than 10,000 Boomers retiring each day. As they de- mand better care, new innovation and new growth, we’ll see further growth in health care real estate, as well. In fact, it’s why Talia Jevan Properties pur- chased the Lifeprint Health Center in Phoenix for $20.5 million. First, the aging population is in- creasing the demand for medical office buildings. According to Bloomberg, sales of such properties hit $6.67 billion
Harmel S. Rayat is an author, serial entrepreneur and President and CEO of Talia Jevan Properties Inc., www. taliajevan.com, a privately held commercial
real estate firm specializing in the acquisition and long- term ownership of Class-A commercial real estate assets throughout North America.
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