- Realtor Magazine released 10 Headwinds the Real Estate Market Faces Next Year which include: 1) Inflation and interest rates; 2) Hybrid work models; 3) Labor shortages; 4) Housing imbalances; and 5) ESG requirements.
- On November 30, FASB proposed several changes to its lease accounting guidance for legally enforceable terms and leasehold improvements involving related-party leases. Comments on the proposal are due by January 16, 2023.
- Modern Healthcare reported 5 takeaways from HLTH Conference, including: 1) Economic troubles loom large in digital health; 2) Profitability is the new king for investors; 3) Investors are interested in opportunities that involve clinical outcomes and human health impact that will result in positive returns; 4) Direct to consumer health care opportunities are still making headlines, and 5) Provider burnout is a real issue that needs to be addressed.
- Operating margins for the three largest for-profit hospital chains exceeded pre-pandemic levels in the third quarter. Margins were 11.4% for HCA, 8.4% for Tenet and 1.2% for CHS.
- According to a new Wall Street Journal article, Covid-related financial relief went to many “well-off system” hospitals that did not need the funding, while other hospitals didn’t receive sufficient funding to “overcome” the strain of the pandemic. At least 1,257 hospitals received aid on top of having a profitable year, 783 hospitals used the aid to overcome losses and 1,644 didn’t receive enough relief to offset losses.
- CBRE released its Q3 2022 Healthcare & Life Sciences Real Estate Investor Update that included the following stats: Q3 MOB transaction volume is at $2.8B – down from $2.9B over the previous quarter, the average MOB cap rate was 5.95% in Q3 and 6.09% over the past 12 months, MOB construction is up 16% from a year ago and new loan originations are low, with many lenders hitting pause until 2023.
- Hill Top Securities released its High Yield Survey. Key takeaways include: 1) Senior living, skilled nursing, project finance and health care are most concerning for investors because of labor shortages and wage pressures; 2) The number one issue in underwriting deals is the assessment of liquidity and equity followed by management and covenant packages; and 3) 90% of investors say an ESG designation is “nice to have” but doesn’t have any tangible value.
- Trilliant Health released a cost comparison for select commodity health care services offered by CVS, Walgreens and Walmart. An office visit costs between $99-$139 at CVS, $89 at Walgreens, $40 at Walmart and $137 at an urgent care. A flu test costs between $70-100 at CVS Health, $66 at Walgreens, $20 at Walmart and $102 at urgent care.
- Flagship Healthcare Trust and AEW Capital Management acquired eight ambulatory surgery centers (“ASCs”) in a joint venture. The ASCs were valued at more than $80 million dollars.
- Becker’s ASC Review reports the 10 most expensive ASC projects for 2022 which totaled more than $3 billion. The top approval was granted by The University of California Board of Regents for a $579 million ASC at UC Davis Health’s Sacramento campus.
Special thanks to Thomas Dziwlik, undergraduate intern, for his assistance in the preparation of this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
