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Northern NJ
3,000 Medical Buildings
48,786,918 SF RBA
$22.06 PSF Base Rent |
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Bergen County
431 Medical Buildings
6,714,398 SF RBA
$25.56 PSF Base Rent |
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SALES
40,000 SF | $22,000,000 Rothman Medical Building, Sewell, NJ Buyer: Rothman Institute Seller: Woodmont Properties JV Atkins Companies
76,308 SF | $9,700,000 25 Lindsley Drive, Morristown, NJ Buyer: JD Moore Seller: Liza Rico |
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LEASES
9,000 SF | 550 Kinderkamack Rd, Oradell, NJ
6,626 SF | 825 Bloomfield Avenue, Verona, NJ*
3,125 SF | 4808 Bergenline Ave, Union City, NJ
*NAI Hanson Transactions
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By Darren Lizzack, MSRE and Randy Horning, MSRE
It’s not hyperbole to suggest the country has faced its worst public health crisis in more than a century. The pandemic
fueled the pace at which trends in the healthcare real estate market had already been taking place. Investment
companies anticipate that — thanks to strong demand, federal stimulus funding, and other factors — this asset
class will continue to attract investors.
Virtual Healthcare
Telehealth increased by necessity, as COVID made it necessary to conduct
medical visits via Zoom and other virtual platforms. Its use spiked during the
worst of the pandemic and while its use has declined somewhat since the
pandemic’s early days, it remains an important, effective way for patients to
seek care.
Digital health services hit over $15 billion in 2020 — nearly double that of
2019. McKinsey & Co. found telehealth adoption grew 35% to 46% over
two years. Virtual medicine has found a permanent home, as the technology
enables those with chronic illnesses or requiring primary care an alternative
to coming into the office.
Behavioral Health Properties
According to one healthcare investor, “Institutional investors have warmed up to having behavioral health tenants in
their buildings and portfolios. We’ve seen cap rates move toward more traditional medical office building valuations.”
A 2020 study conducted by the National Council for Mental Wellbeing found 54% of behavioral health organizations
anticipate increased demand within the mental health services industry. The pandemic had a serious, negative
effect on capacity — 65% of organizations had to cancel, reschedule, or stop accepting new patients. Healthcare
companies continue their investments in facilities that provide behavioral health services. An additional 52% of
behavioral health organizations saw an increased demand for services.
Senior Healthcare Housing
COVID-19 seriously impacted healthcare facilities responsible for caring for seniors. Assisted living, independent
living, memory care, skilled nursing, and other senior housing operators saw significant drops in rental revenue and
profit growth.
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Every day, 10,000 people turn 65 in the U.S. The population of older adults is expected to double over the next 30
years, numbering about 88 million people, representing over 20% of the population by 2050. Demand for this type
of housing will continue to grow.
Increased Outpatient Facilities
An increase in outpatient facilities isn’t new — it’s a trend that’s been building for the last decade or so. It did,
however, accelerate during the pandemic as more hospital systems recognized the value of locating outpatient
centers within the communities they serve.
Other Growing Healthcare Real Estate Trends
Flexible spaces A joint PwC and Urban Land Institute reported on emerging real estate trends says traditionally designed spaces
within healthcare facilities will see a “massive shift” toward more flexibility.
The pandemic forced a quick pivot within these buildings to allow a faster, easier response to the health crisis,
but increased technology, better staffing efficiency, and changing reimbursement practices offer another strong
argument for continuing to create flexible spaces. The trend may include an ability to quickly convert standard
patient rooms, ORs and even waiting rooms into ICUs, for example.
Ongoing construction
The industry will also see the continued expansion of non-traditional healthcare facilities in big box stores and malls
that have closed, and other community locations convenient to consumers. It’s possible the previous trend of
erecting free-standing ERs and urgent care clinics will slow thanks to an oversaturated market. |
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YTD TRANSACTIONS:
TEAM LIZZACK-HORNING |
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| ADDRESS | CITY | SIZE (SF) | TENANT | | 825 Bloomfield Ave | Verona | 6,266 | Geria Dermatology LLC | | 720 E. Palisade Ave | Englewood Cliffs | 881 | Behavior Supports Assoc. | | 59-61 W Pleasant Ave | Maywood | 2,537 | Everyday Urgent Care |
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Teterboro, NJ | 201 488 5800 Parsippany, NJ | 973 463 1011 |
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