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Healthcare policy uncertainty affects medical office sector

by Loretta Clodfelter

1 The healthcare property sector performed well in 2016, but policy uncertainty regarding the Affordable Care Act has some watching the sector warily. According to Colliers International, the medical office building sector had a national vacancy rate of 7.4 percent at the end of 2016 — an all-time low. In addition, net absorption increased 25 percent in 2016, and full-service rents rose 8 percent to a national average of $24 per square foot. “The healthcare sector offers a mixed opportunity in 2017,” notes Mary Beth Kuzmanovich, national director of healthcare services for Colliers. “There will be steady demand for services, driven by demographics and consumer convenience. At the same time, there will be ongoing financial pressures across the healthcare industry to reduce costs, improve efficiency and manage care across the population.” Kuzmanovich says these forces will push healthcare occupiers to evaluate their real estate portfolios to iden

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