In Colliers’ 2020 Healthcare Marketplace Report, we provide insights into how the COVID-19 pandemic may impact the healthcare real estate sector. We also provide our outlook for the sector in 2020 and a recap of performance in 2019.

What are the implications for healthcare real estate? Potential impacts include the following:

• Real estate decision making may largely be put on hold, impacting leasing and acquisition/disposition activity.
• Fewer medical office buildings (MOB) or hospital developments are expected to break ground in the near term. Expect a focus on increasing the availability of options to treat COVID-19 patients through re-designating and converting existing spaces, reopening closed hospitals and the construction of temporary facilities.
• Corporate merger and acquisition activity involving healthcare firms is expected to slow. The current volatility in the capital markets and unfolding impacts on the economy may change the competitive positions and strategies of individual healthcare firms, but the structural changes that have been taking place in the industry should resume in due course.
• Even after the economy and markets stabilize, a period of dislocation and a need for price discovery can be expected.
• Healthcare should be one of the few economic sectors that will gain jobs as a result of the pandemic, with accelerated hiring of medical professionals, administrators, and support staff already underway. Where these positions are located, how long they will exist, and how they will be housed while they are needed are being decided on a real-time basis.
• The healthcare industry’s demand curve may be shifted upward as a result of post-crisis policy changes. There is debate over whether the U.S. was sufficiently prepared for a pandemic. Individual states are proving to have different levels of healthcare capacity relative to the size and potential needs of their populations. These factors are being spotlighted by COVID-19’s rapid spread.

For further insights into the potential impacts of the healthcare sector as well as a recap of performance 2019 and our outlook forward for the sector in 2020, download our full 2020 Healthcare Marketplace Report.