Health law set to affect office market, observers say
The Affordable Care Act isn’t changing just how Americans get health insurance and medical care.
It’s also set to affect the commercial office market.
More people with health coverage will merge with an aging population to drive demand for medical services in the next decade, Marcus &Millichap’s recent Medical Office Research Report says.
But it’s difficult to quantify just how much those trends will push demand for office space. That’s because a growing doctor shortage, a boom in retail minute clinics, telemedicine and health industry consolidation could all have unpredictable effects on who needs offices, and where, the report said.
Some trends are already affecting demand. Consider the shift toward more consumer-oriented care delivery, which has encouraged hospitals and health systems to open more outpatient centers and satellite offices. On those users’ wish lists: Newer buildings with flexible designs and features that promote efficiency. For marketing and branding purposes, hospitals and health systems also prefer aesthetically pleasing, visible buildings.
Put it all together, and it means landlords with modern medical buildings are seeing lower vacancy rates and above-average rents. Medical-office buildings with major hospital tenants traded at about a 40 percent premium compared with the overall market nationwide.
The one drawback for landlords working with big hospital systems? Those systems have size and credit on their side, and that could keep a lid on rents going forward.
On the other side, older medical-office properties that house multiple independent practices will “likely bear the brunt of tenant attrition due to industry consolidation and physician retirement,” the study said. An estimated 45 percent of office-based doctors are over 55, and many of them may consider retirement amid recent stock-market gains and coming penalties for noncompliance with federal care standards.
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Miracle to lead Alliance
Bobbi Miracle of Commercial Executives Real Estate Services will serve as president of the Commercial Alliance Las Vegas, which is the Greater Las Vegas Association of Realtors’ commercial arm, beginning Jan. 1. Miracle, a Certified Commercial Investment Member, has more than 14 years of local real estate experience.
Other 2015 alliance board members are: Hayim Mizrachi of MDL Group, immediate past president; Soozi Jones Walker of Commercial Executives Real Estate Services, president-elect; Cathy Jones of Sun Commercial Real Estate, treasurer; and directors Paul Bell and Chris McGarey, both of Berkshire Hathaway HomeServices Nevada Properties; Jennifer Ott of ROI Commercial Real Estate; Tedd Rosenstein of Nevada Development and Realty Co.; and Tom Lisiewski, of Your Real Estate Co.
Members representing local commercial real estate organizations affiliated with the alliance are: Robin Civish of CCIM; Xavier Wasiak of the Society of Industrial and Office Realtors; Rod Martin of NAIOP Southern Nevada; Christopher McGarey of Institute of Real Estate Management; Melissa Campanella of Commercial Real Estate Women; Tom Lisiewski of Commercial Marketing Group; Andrea Blue of Building Owners and Managers Association; Petra Latch of Las Vegas Appraisal Institute; and Bob Burley of Nevada Business Brokers Association.
Contact Jennifer Robison at jrobison@reviewjournal.com. Follow @J_Robison1 on Twitter.
