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Research - APRIL 14, 2020

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Medical office well positioned for quick recovery

by Andrea Zander

The medical office sector is likely to recover quickly following an economic downturn caused by COVID-19 and the efforts to contain it. While the pandemic will affect health-related providers in the second quarter, the long-term impact of the downturn should be manageable, reported Marcus & Millichap. A backlog of appointments should benefit medical providers able to weather the pandemic.

The buildup of work that will stem from practitioner closures and appointment cancelations will allow medical office tenants to shore up financials and avoid shuttering once the pandemic ceases. This factor, along with the nation’s sizable aging baby boomer cohort, provides a foundation that supports investor confidence, particularly with well-located assets that feature the proper infrastructure to service modern medical needs in high demand. Over the long term, as younger millennials marry and seek residence in areas of lesser density to start families, a rise in non-urban relocatio

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