Changes in Healthcare Create Surge in Healthcare Real Estate

  • September 10, 2018

Between helping doctors pay for the right office space and finding loan solutions for medical facilities, lenders are seeing more and more demand in commercial real estate for healthcare.

  The reform of the healthcare system and aging population of baby boomers have started an economic chain reaction for commercial real estate lenders.   With 16.4 million uninsured people gaining health insurance under the Affordable Care Act — representing a 35% reduction in those who are uninsured — ripples in the markets are bound to occur. And with a large portion of the population growing into their elderly years, health care demand is surging.   But the changes have not been limited to the healthcare industry. Healthcare is changing, including how providers treat patients — less treating of sick patients, more sickness prevention — which has an effect not only the design of doctors’ offices but also on how healthcare providers make real estate choices.   Where and how patients are treated affects development, leasing and management of medical-based real estate properties. Off-campus locations for specialty centers, such as oncology, allow hospitals to add patients but not have to spend as much on space.   With more doctors’ offices moving away from the hospitals and into medical office buildings, commercial real estate lenders such as the Small Business Administration and AVANA Capital are assisting developers and real estate owners in finding a way to finance their properties.   Whether it’s purchasing a medical office building or senior living facility, improving or expanding existing healthcare space or helping a doctor expand a practice, commercial real estate lenders are helping healthcare clients find what they need, with jobs created and communities strengthened along the way.   Between helping doctors pay for the right office space and finding loan solutions for medical facilities, lenders are seeing more and more demand in commercial real estate for healthcare. Businesses are turning to AVANA Capital at critical moments to ask for help in getting deals done, and, as a result, creating or saving jobs and Small Business Administration loans are becoming a primary tool for healthcare businesses to grow and prosper.   Some examples:   — The second largest senior healthcare provider in Georgia needed a loan to help a Marietta, Georgia healthcare facility improve its efficiency, resident count and building standards. With a short timeline, AVANA Capital arranged an SBA 504 loan for the borrower in less than 45 days. The borrower relied on AVANA Capital to provide both purchase financing and tenant improvement dollars in one very competitive and attractive package. — A doctor who was able to achieve his goal of expanding his medical practice in Rio Rancho, New Mexico because AVANA Capital provided the financing via an SBA 504 loan. The construction and permanent financing was managed by AVANA and the project was completed within 10 months of the SBA application. The expanded medical clinic recruited 15 new members for the medical practice. — The quick and important purchase of a 100-room nursing home in College Park, Georgia where the borrowers already owned and operated assisted living facilities and were looking to expand their portfolio. But the property was only on offer with a very short deadline and AVANA Capital provided an SBA 504 loan solution for the purchase of the property to offer a quick close with competitive rates. — Providing the means for a Glendale, Calif. home healthcare provider to purchase the property it had been leasing, which allowed it to establish its headquarters. — Helping a Phoenix borrower who was renting medical office space for their practice purchase a space nearby via an SBA 504 loan. With the demand for medical office buildings expected to grow by 19 percent by 2019, it’s important for healthcare providers to be aware that there is help for them if they are looking to find the right space in the right location.