- The Federal Reserve agreed to hold its benchmark interest rate while signaling that rate cuts may be in the cards for 2024. If economic conditions continue to improve, the Federal Reserve plans to reduce interest rates by .75% in 2024. After the news broke, the stock market rallied and real estate investors expressed new optimism in 2024.
- ASC operators are bullish on growth opportunities in 2024. Next year, ASC operators plan to focus on the following strategies: 1. New service lines such as total shoulder and knee procedures; 2. Recruiting and retaining staff through better benefits packages; 3. Partnering with other providers to improve reimbursement rates; 4. Revising payer contracts to keep up with inflation; and 5. Investing in technology such as artificial intelligence and new EMRs.
- The Walt Disney Company announced plans to build a new active adult community in Pittsboro, North Carolina (near Raleigh) under its Storyliving brand. The community will be located on a 1,500-acre parcel of land and will include 4,000 residential units for residents 55 and older. This is the second community announced by Disney. The first is under construction in Rancho Mirage, California.
- S&P released a new U.S. REIT report called the NAV Monitor. The report shows the discount (or premium) between share values and the net asset value (NAV) of REIT assets. Overall, U.S. REITs traded at a median 20.2% discount to their NAV. Office REITs had the largest discount to NAV on one end of the spectrum while data center REITs are trading at a premium to NAV. Health care REITs are trading at a 4.9% discount to NAV.
- Hilltop Securities released its annual high-yield impact survey. The survey is designed to look at trends in the high-yield bond market. Key takeaways include: 41% of survey participants believe bond yields have peaked; participants expect to see defaults in the senior living and skilled nursing sectors; and liquidity is the single most important factor that investors focus on when looking at opportunities, followed by the management team and covenant package.
- Gilbane Construction has been selected as the construction manager for Mayo Clinic’s $5B expansion of its Rochester, Minnesota campus. Gilbane has launched a website for subcontractors to get prequalified to work on the project. In terms of dollars, Mayo’s expansion project is the largest hospital construction project being planned or under construction in the U.S.
- Swedish Health (Seattle) is scheduled to break ground on its largest construction project in its 100-year history. The health system is expanding its hospital tower, adding a building for outpatient and imaging services and adding office space. The project will double the size of the campus.
- UPMC (Pittsburg) is reportedly in discussions to sell four senior housing communities to Oakdale Seniors Alliance. UPMC is the second largest elder care provider in southwestern Pennsylvania.
- Med Center Health in Bowling Green, Kentucky announced three new building projects that are anticipated to cost $145M. The health system announced plans for a new patient tower, an off-campus urgent care center, a free-standing emergency department and a new off-campus medical office building.
- Desert Healthcare District in Palm Springs, California and Tenet Healthcare are in the process of renegotiating a lease for Desert Regional Medical Center. The current discussions include a 30-year lease term, a $75M payment, along with annual payments thereafter.
For more information on real estate matters, please contact:
- Andrew Dick at adick@hallrender.com or (317) 977-1491;
- Joel Swider at jswider@hallrender.com or (317) 429-3638; or
- Your primary Hall Render contact.
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.
