October 9, 2019
Healthcare is one of the most dynamic industries in the United States, if not the most dynamic, due to the involvement of the federal government, changing demographics, and shifting patient expectations. More than 200 healthcare real estate professionals gathered at The Resort at Pelican Hill for Connect Media’s third annual Connect Healthcare event. Experts shared a wide range of insights, discussed hot trends and uncovered the primary challenges facing the industry.
The event kicked off with a panel discussion, “The State of Healthcare: A View from the Top.” Experts detailed the severe labor shortage the healthcare industry is facing. From primary care physicians to certified nursing assistants, there just aren’t enough providers to handle the volume of patients today, let alone those in the future. Panelist Steven Stubbs of Adventist West said the dearth of primary care physicians is a “gigantic issue” – one that severely impacts the overall wellness of Americans since PCPs typically serve as the gateway for patients.
Over lunch, participants enjoyed a keynote presentation, “Improving Population Health Through Wellness Centers” from Kenneth Gorman of Power Wellness Management. Wellness and preventative care will continue to grow in importance as the population ages and reimbursement models change.
After lunch, the audience was asked to share its predictions for cap rates for healthcare real estate. In “Follow the Money: Capital Markets Update,” moderator Travis Ives with Cushman & Wakefield surveyed the audience about cap rate expectations for 2020. Attendees unanimously agreed that cap rates would remain unchanged next year, which confirms Cushman & Wakefield’s findings from its recent client survey. Panelists also discussed the influx of capital from new investors, particularly private equity, which is supporting cap rates.
In “Patient-Centric Care: The Next Wave in Design and Development,” panelists explored the shifting attitudes that health systems have regarding brand building. As part of their brand building strategies, signage has become very important. “That’s been a big change, and we’re seeing it everywhere,” said CBRE’s Angie Weber. “We used to not be as sensitive to that, but now we have to think about it.” The subject of parking also emerged as a key issue facing developers and owners today.
During the next panel, “The Big Squeeze in Senior Living,” Humair Sabir of Blueprint Healthcare Real Estate Advisors addressed the ongoing struggle to find and retain quality employees. “That’s going to be very important,” he said. Experts also discussed the trend of “unbundling” services—which involves splitting up rent and other a la carte services such as laundry and food. “It’s about finding a way to make things more affordable,” said Paul Mullin of Flatiron Development Group. He advised the audience to visit a number of seniors housing facilities to better understand the market, both from an investment standpoint, and as future clients.
The conference concluded with “Active Investors Shaping the Market.” The panel featured a variety of investors from private equity to public and private REITs. Experts agreed that investors continue to view healthcare real estate as “recession resistant”—something that is particularly important given fears of an upcoming recession and uncertain interest rate environment.
For questions, comments or concerns, please contact Jennifer Duell Popovec