Recession-resistant healthcare real estate has strong supply and demand fundamentals
The fundamental story of healthcare real estate investment begins with demographics — everyone knows the U.S. population is getting older — but it doesn’t stop there. Both supply and demand fundamentals support the investment thesis.
On the demand side, healthcare is a $3 trillion industry; at approximately 20 percent of GDP, it represents the second-largest component of the economy. And the healthcare industry is not only large but growing rapidly.
For real estate investors, this makes healthcare property very attractive. In particular, real estate investors are targeting the medical office segment, where shifting trends in the provision of healthcare have made medical office buildings (MOBs) a more central part of doctors’ and patients’ interactions.
Along with a robust demand story, healthcare real estate also has a strong supply story — i.e., there is not enough supply to effectively meet increasing hospital system and patient demand. This is bec