New Jersey Healthcare

1Q 2022 Report


Northern NJ


Medical Buildings

48,786,918 SF


$22.06 PSF

Base Rent

Bergen County


Medical Buildings

6,714,398 SF


$25.56 PSF

Base Rent




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


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



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.

More recently, vaccinations and improved safety protocols have improved the sector’s performance, as has the growing customer demand. The U.S. has almost 29,000 assisted living communities — with nearly one million licensed beds — today. New Jersey alone has 200 assisted living communities with 21,300 beds or licensed maximum capacity serving an average of 83 people apiece. 

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 
An industry report estimated spending on healthcare construction projects will reach $45.8 million in 2023. While the pandemic may have temporarily paused healthcare real estate construction projects, the pace is picking up again, fueled by tenant and investor demand, low interest/default rates, and occupancy rates. 

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.




825 Bloomfield AveVerona6,266Geria Dermatology LLC
720 E. Palisade AveEnglewood Cliffs881Behavior Supports Assoc.
59-61 W Pleasant AveMaywood2,537Everyday Urgent Care

Darren M. Lizzack, MSRE

(201) 906-4376

Teterboro, NJ | 201 488 5800

Parsippany, NJ | 973 463 1011