The healthcare industry often changes due to technological innovation, discoveries, and consumer demand. However, the recent COVID-19 pandemic and adjustments in legislation have led to several new trends in healthcare commercial real estate.

This type of commercial real estate is a niche for investors because it behaves differently from the rest. There are heavier regulations, the need for precision, and a constantly changing environment that often demands renovation and redevelopment.

While the rewards make it worth the effort, there is a critical need to stay in line with trends to ensure you respond to the changes efficiently.

What are the Latest Trends in Healthcare Commercial Real Estate?

Knowing about the latest trends in healthcare commercial real estate will help you make the right decisions for your upcoming investments. Following are the most prominent ones that you need to incorporate in your strategy.

1. Reduction in Independent Clinics

There has been a significant decrease in independent clinics due to increased regulations. Physicians are increasingly leaving their independent practices in favor of hospital-affiliated medical office buildings (MOB) to avoid making consistent changes.

The change has led to a reduction in demand for small medical clinics around the country. Therefore, it is better to invest in MOBs because their demand is increasing.

2. Increase in Demand for Short-Term Lease Agreements

The increase in regulations has also affected the general norm around lease agreements for independent clinics. Physicians are increasingly opting for short-term leases because they want to avoid committing to the clinic.

They are waiting to see the latest developments in regulatory changes and want to have an easier way out if the new rules are unfavorable.

3. Higher Focus on Mental Health Facilities

The COVID-19 pandemic led to a significant decline in people’s mental health, necessitating the development of mental health care facilities. More organizations, institutions, and practitioners are interested in setting up formal care centers to cater to more patients.

Therefore, investing in such facilities will generate a higher return as the demand increases.

4. Smaller Scale Hospitals

Bigger hospitals require significant resources to run, making it impossible to increase their number to cater to increasing patients. Hence, there has been a recent shift in strategy, with practitioners and investors choosing to create a higher number of smaller-scale hospitals.

Increasing the number has also improved healthcare access to people, making it a practical and sustainable strategy. Therefore, consider adding this healthcare commercial real estate to your portfolio.

5. The rise in Virtual Healthcare

Social distancing during the COVID-19 pandemic pushed everything online, including doctors’ appointments. It took time for people to adjust to virtual healthcare, but the past two years have been transformational.

As doctors and patients continue to rely on this method, the demand for larger offices has decreased. Doctors no longer need extensive space because they are managing fewer in-person appointments.

Final Thoughts

Overall, the COVID-19 pandemic, increase in regulations, and a greater focus on mental health are driving healthcare commercial real estate changes. Don’t hesitate to contact the CHRE team to explore commercial real estate investment in Rio Grande Valley.

We have been working in the industry for several years and find the best deals for your portfolio.