Medical and Healthcare Commercial Real Estate: Valuable and Stable
As you may or may not know, medical and healthcare commercial real estate in Denver and the surrounding areas is a rapidly growing market.
One of the major players in this market is the Denver Health Medical Center, which is a public hospital that serves as the primary healthcare provider for the city's underserved population. The hospital has several locations throughout the city, and it is currently undergoing a major expansion project that will add more than 500,000 square feet of new space.
Another major player in the Denver healthcare market is the University of Colorado Hospital, which is a major teaching hospital and research center. The hospital has a strong presence in the city and is known for its expertise in cancer care, heart disease, and organ transplantation. The hospital has recently undergone a $400 million expansion project, which included the construction of a new patient tower and additional operating rooms.
In the surrounding areas, there is also a growing demand for healthcare services. The population in the suburbs of Denver is growing rapidly, and many new medical facilities have been built to meet the demand.
There are a few reasons why medical commercial real estate, which includes properties such as hospitals, clinics, and medical office buildings, is often considered a stable investment and proven to be a highly resilient asset class in times of economic downturns.
One reason is simply supply and demand. Americans are living longer. Typically as we get older, we seek more medical treatment. It doesn’t matter if the economy is good or bad. If we get sick, we see a doctor. This means that demand for healthcare services is relatively stable, even during economic downturns, which in turn helps to ensure a steady stream of revenue for medical real estate landlords.
Another factor that contributes to the creditworthiness of medical real estate tenants is the fact that many of these tenants are government-funded entities, such as hospitals and clinics. These entities often have more stable and predictable revenue streams, as they are typically not as vulnerable to changes in consumer spending patterns as other types of businesses.
Medical real estate is often considered to be a relatively low-risk investment, as it is typically not as sensitive to changes in interest rates and other macroeconomic factors as other types of real estate. This is because the demand for healthcare services is driven by factors such as population growth and aging, rather than economic conditions.
Overall, the creditworthiness of medical real estate tenants and the relative stability of the healthcare industry make medical real estate a highly resilient asset class in times of economic downturns. This, coupled with the fact that healthcare is a basic human need, make this a relatively low-risk investment for landlords.
When you think of medical real estate, it doesn’t necessarily just include hospitals and your traditional doctor’s office. Here’s a list of some of the growing types of real estate in the medical / healthcare field.
Medical office buildings
Urgent care centers
Medical research facilities
Long-term care facilities
Ambulatory surgery centers
Medical retail space (e.g. pharmacies, medical supply stores)
Medical storage and distribution facilities.
Assisted living facilities
Skilled nursing facilities
Mental health clinics
Medical call centers
Biotechnology/pharmaceutical research and development facilities
Physical therapy centers
Addiction treatment facilities
Medical education facilities
Hospice care centers
Medical data centers
If you’re looking to invest or sell healthcare commercial real estate in Colorado, you should speak with a broker or brokerage that has experience in this type of asset-class. We have sold and leased numerous medical and healthcare related facilities in the Denver metro area to not only owner/users but also investors.