Healthcare real estate capital expected to reach $25 billion in 2022: report

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CBRE’s Chris Bodnar (CBRE, iStock)

Money should continue to flow into healthcare real estate this year as the sector attracts continued investor interest.

About $25 billion in capital is expected to be allocated to healthcare real estate this year, according to a CBRE report. This would mark a significant increase from 2021, when the volume of transactions in the sector was just under $16 billion.

Buyers plan to flood the market this year to take advantage of the booming sector. Among respondents, 84% said they plan to be net buyers in the market in 2022, compared to just 14% who plan to be net sellers.

Medical office buildings were of most interest to respondents, with 99% saying the type of property met their acquisition criteria. The biggest increase from the previous year was in outpatient surgery centers, which grew 17% from 2021.

The stability of the healthcare real estate sector is attracting investor interest. Almost all respondents to a CBRE survey reported that their portfolio occupancy remained the same or increased year-over-year in 2021. Only six percent of respondents cited a severe impact from the COVID-19 in 2020.

Investors, meanwhile, are feeling increasingly confident in the healthcare real estate sector’s resilience to recession, as 85% of respondents believed the sector would hold up well in a downturn, up 5 bps. percentage over last year.

“Healthcare and life sciences have historically weathered economic downturns and continue to be viewed as a safe haven for real estate investors in times of economic distress,” said Chris Bodnar, co-head of capital markets. health and life sciences at CBRE. to the Trade Observer.

The report also touched on the booming life sciences sector, noting that venture capital funding reached a record $32.5 billion in 2021. 2022 is expected to be another big year for the life sciences.

CBRE interviewed healthcare REITs, private investors, institutional investors and healthcare real estate developers.

The strength of the healthcare real estate sector has created major players in the field. Earlier this year, Healthcare Trust of America agreed to merge with Healthcare Realty Trust after advanced discussions in February. From these talks, the combined market value of the companies would be over $11 billion.

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