Sure, an aging population is key to the growth of the medical office sector, but it’s a bit more complex than that, according to a new second-half 2019 report from Marcus & Millichap. For example, consider that the 2.7 percent increase in health-care services employment is running up against a shortage of qualified medical services personnel. That in turn favors the expansion of outpatient care—and that trend favors purpose-built medical office facilities, the report explains.
In addition, the nationwide decrease in physician-owned practices, from nearly half of all locations in 2012 to just 31 percent in 2018, has created efficiencies that have helped to maintain investor interest. And behind all that, the U.S. population is indeed aging. Those aged 65 and older will make up 26 percent of the total population by 2029, versus only 15 percent in 2009. Consequently, the medical office building asset class continues to see growing deliveries, substantial deal flow, generally stable vacancies and rising rents and prices.