Beyond the Health Crisis: National Medical Office Outlook
Third Quarter 2020
Medical Office Poised for Strong Return as Patient Care Adapts and Healthcare Needs Climb
Virus upends the healthcare industry. The medical office sector is being tested as operators navigate new challenges created by COVID-19. Medical office was once perceived to be a more resilient asset class during a downturn, but the unique uphill battle faced by healthcare providers due to the pandemic has choked revenue streams and considerably shrunk margins. Restrictions on elective surgeries and the voluntary delay of non-emergency visits to doctors’ offices, dentists, and dermatologists have weighed on operations, contributing to job losses and furloughs. Despite the short-term costs, the healthcare industry will be one of the quickest to bounce back from the pandemic since the care needs of a growing and aging population continue to increase. Medical services are returning as states move through reopening phases, and pent-up demand from postponed procedures and office visits provide a positive outlook.