- Health care REITs Healthpeak Properties, Inc. and Physicians Realty Trust closed a $21B merger. The combined company oversees a 52 million-sf portfolio, including 40 million sf of outpatient medical office properties concentrated in high-growth markets such as Dallas, Houston, Nashville, Phoenix and Denver. The remaining square footage is lab space.
- A recent NEJM Catalyst survey of clinicians and health care executives found that 61% intend to renovate existing health care buildings in 2024, and more than half plan to construct new buildings. The top reasons for these investments are to increase capacity, improve patient access and optimize efficiency.
- CBRE published its 2024 U.S. Investor Intentions Survey. Among the findings, more than half of investors plan to buy more assets in 2024 than in 2023, investors continue to favor Sun Belt cities, high-growth secondary markets and some large East Coast markets for investment in 2024. The biggest concerns for 2024 include higher interest rates, tight credit conditions and differing buyer and seller expectations.
- Becker’s indicated that Ascension has improved year-over-year operating income for the past two quarters, and a major part of its financial recovery strategy involves monetizing real estate assets, including recent sales of Gulf Coast Health System’s (AL) assets, a sale of Our Lady of Lourdes Memorial Hospital System (NY), a planned sale of Via Christi Hospital (KS) and various other sales and joint ventures in the works.
- On its latest earnings call, Community Health Systems (TN) said it is evaluating potential sales of over $1B of hospital assets, including a pending sale of two NC hospitals to Novant Health, which has been held up pending an FTC challenge.
- A West Virginia House of Representatives committee voted to eliminate health care certificate of need (“CON”) in the state, other than for hospice care homes. Currently, all health care providers, unless otherwise exempt, must obtain a CON before adding or expanding health care services or making certain acquisitions above dollar thresholds.
- Newmark published its 2023 Medical Outpatient Building Sector Year in Review. Among the data, commercial real estate debt origination decreased 44% across all major property types, construction cost escalations slowed throughout the year, outpatient medical sector investment declined 48% and cap rates for MOBs averaged 5.85%.
- Modern Healthcare reported that birthing center operators are encountering resistance from CON laws and hospital competitors in several states.
- University of California, Irvine Health plans to spend $975 million to acquire four hospitals from Tenet Healthcare. The acquisition, which is expected to be completed this spring pending regulatory approvals, would triple UCI Health’s licensed bed count to about 1,317.
- University of Florida Health broke ground on a new 42.5-acre health and wellness campus west of St. Augustine, FL. The project is expected to cost over $1B and will ultimately include 150 licensed beds, as well as expansions of orthopedics, cardiac care, women’s services, general surgery and community health initiatives.
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.
