Healthcare Facilities

• 2019 represented another year of growth for Houston's healthcare real estate. The aging population is driving the need to establish more healthcare facilities. The fastest-growing types of medical properties are "hospitals, medical office buildings, surgery centers, imaging centers, urgent care facilities, rehabilitation facilities, behavioral facilities, and assisted living properties."
• Throughout 2019 an increase in the medical office inventory saw the vacancy rate increase from 13.3% to 15% over the year. Over the same time period, the average rent increased from $24.09 to $24.57 per square foot. The average rent increased from $25.08 to $30.75 per square foot for properties that are sublet. The expected area growth of 7,500 people per month suggests the demand for medical properties will remain high.
• The demand for medical offices is particularly strong in suburban areas. There is a trend toward "off-campus" offices, which looks set to continue for the foreseeable future. This trend will drive demand.
• As new hospitals are built, there is a trend toward re purposing the older hospitals. Many are transformed into rehabilitation centers or behavioral and assisted living facilities.
• The aging population is shaping the healthcare industry in Houston. New construction is occurring at geographically strategic positions. Currently demand for suitable healthcare facilities exceeds the available supply.
• Real estate should be the focus of healthcare suppliers looking to reduce costs.

Summary

• In our first hour of research, we have reviewed the available information in the public domain and scoped the time required to complete the project. There is a considerable amount of information available on the future of healthcare in Houston and Texas, but our impression of the trends is there is less information available on the current trends, with the majority of the available sources referencing national, rather than local trends.