Colliers International Reports On Trends Driving Resurgence In Medical Office Investment

SEATTLE, Feb. 26, 2014 /PRNewswire-USNewswire/ -- Colliers International, a global leader in commercial real estate services, today released its first-ever medical office report. The report, titled "Medical Office Trends and 2014 Outlook," outlines trends in the health care market and provides a comprehensive view into the key drivers impacting the medical office space.

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The report, published by Colliers International's research department and featuring contributions from Colliers' Healthcare Services Group, analyzes current trends in the health care industry and their impact on the health care real estate market, offering both a leasing and investment point of view. Colliers' Healthcare Services Group focuses solely on health care-related real estate and is led by its national directors, John S. Wadsworth and Jim Allen.

"Our overall finding is that the consolidation of the health care industry—in large part a result of the Affordable Care Act's regulations—has created many trends that are impacting the medical office market," said John S. Wadsworth, Colliers vice president and national director, Healthcare Services Group. "This consolidation trend is likely to continue, and has significant implications for the medical office market, both in terms of leasing activity and construction of new facilities."

Some key insights from the report include:

• Short term, health care  demand is being driven by an additional 32 million people insured by the Affordable Care Act (ACA); longer term, demand will be driven by more than 20 percent of the U.S. population being 65 or older by 2029.
• ACA regulations mean more consolidation among health care providers and insurers, further tilting medical office demand to large companies.
• Medical office accounts for 25 percent of all U.S. office space under construction. Construction has decreased significantly since the recession: 1.8 MSF in the first half of 2013 vs. 8.4 MSF in the first half 2009 (markets tracked by Colliers).
  • The decrease in construction is attributable to conversion of non-traditional properties, especially big-box retail and suburban shopping centers, and uncertainty regarding impact of ACA on health care delivery mechanisms.
• There was $2.47 billion in medical office investment sales transactions in Q4 2013, the highest since Q4 2006, and even exceeding the Q4 2012 surge prior to the 2013 tax increases. This year is expected to be a strong year in terms of medical office investment sales, given the scarcity of properties, availability of capital, and opportunities in secondary/tertiary markets.

Colliers' Healthcare Services Group is solely focused on health care-related real estate, from leasing and sales to property and asset management to appraisal and valuation.

To access the full report or for more information, visit: http://www.colliers.com/us/healthcareservices/marketreports.

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ABOUT COLLIERS INTERNATIONAL
Colliers International is a global leader in commercial real estate services, with over 13,500 professionals operating out of more than 482 offices in 62 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.

SOURCE Colliers International