{"id":1004610146,"date":"2022-11-03T03:31:35","date_gmt":"2022-11-03T11:31:35","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004610146"},"modified":"2022-12-09T02:36:40","modified_gmt":"2022-12-09T10:36:40","slug":"health-care-cre-soldiers-on-despite-the-sectors-woes","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/","title":{"rendered":"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0"},"content":{"rendered":"
\"\"<\/a>

Image by StockSnap via Pixabay.com<\/p><\/div>\n

Like every other sector in the economy, health care was ambushed by the COVID-19 pandemic, yet that industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.<\/p>\n

It\u2019s a complex situation that JLL<\/strong>\u2019s brand-new 2022 Healthcare and Medical Office Perspective<\/a> examines closely, including how it plays out for health-care real estate as an investment.<\/p>\n

\u201cDespite the challenges, the medical office sector remains one of the most resilient<\/a> commercial real estate sectors, and investors view it as a key alternative asset class due to unwavering demand,\u201d JLL reports.<\/p>\n

That\u2019s the good news. But the health-care sector still faces serious disruptions, especially higher costs, labor shortages and changes in reimbursements, all of which are diminishing health system margins.<\/p>\n

As those margins continue to suffer, health-care systems are having to put a stronger emphasis on cost-cutting. A decrease in patient volumes because of the pandemic is one of the factors here, a decrease that has yet to fully turn around.<\/p>\n

\n

READ ALSO: Life Science Outlook Remains Strong<\/a><\/p>\n

\n

The fact that since February 2020 one in five health-care workers have quit is a stark measure of the turnover in the sector. Labor costs typically total about 55 percent of a health-care system\u2019s operating costs, and from January 2019 to March 2021 the median per-patient labor cost rose by 37 percent, JLL reports, citing data from health-care consultants Kaufman Hall<\/strong>.<\/p>\n

And while an aging population helps to drive health-care business, the growing number of Americans on Medicare and Medicare Advantage is shifting the payer mix toward governmental sources, whose reimbursement rates are below those of commercial insurers.<\/p>\n

CRE after M&A<\/h2>\n

After labor, real estate is one of health-care\u2019s major costs, and it\u2019s here that JLL sees health-care operators engaging in creative strategies such as \u201cBlending and extending leases to reduce rent or square footage in exchange for longer terms\u201d and \u201cBundling leases where there are multiple locations and significant square footage with a single landlord.\u201d<\/p>\n

In the context of record recent health-care M&A activity\u2014the second quarter of this year saw 13 transactions totaling $19.2 billion in annual revenue among the various parties\u2014JLL reports that providers are reaping the real estate benefits of large scales by, among other approaches, rationalizing their ambulatory portfolios.<\/p>\n

Meanwhile, medical office building completions seem to be stalled below pre-pandemic levels because of cost increases, macroeconomic worries and supply chain issues. Development starts are nonetheless rebounding, and JLL notes that medical tenants are less likely to turn over than other commercial tenants.<\/p>\n

Nationwide, JLL says that in 2021 and 2022, absorption outpaced new deliveries and drove occupancy above 90 percent.<\/p>\n

\u201cMedical office real estate remains in high demand by investors due to tenants\u2019 creditworthiness and fundamentals that were less disrupted by the pandemic than the commercial sector,\u201d JLL concludes.<\/p>\n","protected":false},"excerpt":{"rendered":"

Higher costs, labor shortages and changes in reimbursements are diminishing health systems’ margins, a new JLL report finds.<\/p>\n","protected":false},"author":882,"featured_media":1004499787,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21754,23891,21742],"tags":[32796,36278],"class_list":["post-1004610146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-medical-office","category-national","category-latest","tag-jll","tag-medical-office-building"],"acf":[],"yoast_head":"\nHealth-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0 - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Health care was ambushed by the COVID-19 pandemic, yet the industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0\" \/>\n<meta property=\"og:description\" content=\"Health care was ambushed by the COVID-19 pandemic, yet the industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-03T11:31:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T10:36:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/\",\"name\":\"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0 - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg\",\"datePublished\":\"2022-11-03T11:31:35+00:00\",\"dateModified\":\"2022-12-09T10:36:40+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555\"},\"description\":\"Health care was ambushed by the COVID-19 pandemic, yet the industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg\",\"width\":800,\"height\":620,\"caption\":\"Image by StockSnap via Pixabay.com\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555\",\"name\":\"Scott Baltic\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/06\/Scott.jpg?w=96\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/06\/Scott.jpg?w=96\",\"caption\":\"Scott Baltic\"},\"description\":\"Scott Baltic has been a contributing editor with Commercial Property Executive since 2011 and also wrote for its predecessor, Commercial Property News. He started writing about CRE in 1988 for a group of Chicago-based publications and in 1989 became the editor of Midwest Real Estate News. After moving on from there in 1991, Baltic continued writing occasionally about real estate, for publications like the Chicago Sun-Times, National Real Estate Investor, Urban Land, Shopping Center World and Architect\u2019s Newspaper. He earned a master\u2019s in journalism from Northwestern University\u2019s Medill School of Journalism and has a bachelor\u2019s from North Park University.\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/scott-baltic\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0 - Commercial Property Executive","description":"Health care was ambushed by the COVID-19 pandemic, yet the industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/","og_locale":"en_US","og_type":"article","og_title":"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0","og_description":"Health care was ambushed by the COVID-19 pandemic, yet the industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.","og_url":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2022-11-03T11:31:35+00:00","article_modified_time":"2022-12-09T10:36:40+00:00","og_image":[{"width":800,"height":620,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg","type":"image\/jpeg"}],"author":"Scott Baltic","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/","url":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/","name":"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0 - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg","datePublished":"2022-11-03T11:31:35+00:00","dateModified":"2022-12-09T10:36:40+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555"},"description":"Health care was ambushed by the COVID-19 pandemic, yet the industry\u2019s stresses were\u2014and continue to be\u2014more challenging in multiple ways.","breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg","width":800,"height":620,"caption":"Image by StockSnap via Pixabay.com"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/health-care-cre-soldiers-on-despite-the-sectors-woes\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Health-Care CRE Soldiers On, Despite the Sector\u2019s Woes\u00a0"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555","name":"Scott Baltic","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/06\/Scott.jpg?w=96","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/06\/Scott.jpg?w=96","caption":"Scott Baltic"},"description":"Scott Baltic has been a contributing editor with Commercial Property Executive since 2011 and also wrote for its predecessor, Commercial Property News. He started writing about CRE in 1988 for a group of Chicago-based publications and in 1989 became the editor of Midwest Real Estate News. After moving on from there in 1991, Baltic continued writing occasionally about real estate, for publications like the Chicago Sun-Times, National Real Estate Investor, Urban Land, Shopping Center World and Architect\u2019s Newspaper. He earned a master\u2019s in journalism from Northwestern University\u2019s Medill School of Journalism and has a bachelor\u2019s from North Park University.","url":"https:\/\/www.commercialsearch.com\/news\/author\/scott-baltic\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/12\/chair-2584260_1920.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004610146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/882"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004610146"}],"version-history":[{"count":4,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004610146\/revisions"}],"predecessor-version":[{"id":1004610257,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004610146\/revisions\/1004610257"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004499787"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004610146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004610146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004610146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}