The Healthcare Real Estate team at Sheppard Mullin had the privilege of attending the Connect Healthcare Real Estate Conference in Newport Beach, California, on September 28, 2023. This event provided an invaluable opportunity for our team to engage with thought leaders and professionals within the industry. Here are the key takeaways that resonate with our commitment to advancing healthcare real estate solutions:
Meeting Growing Demand: Health systems are facing unprecedented challenges, including rising costs, labor shortages, and capital constraints. Despite these hurdles, healthcare real estate continues to shine as a top-performing asset class. The desire for accessible care and enhanced amenities fuels the demand for healthcare real estate. Outpatient care, in particular, is on the rise, with experts projecting a substantial 25% growth in the next five years. This trend emphasizes the importance of strategically locating medical facilities to meet the evolving needs of communities.
AI's Impact on Healthcare Real Estate: Placer.ai shared intriguing insights into the influence of healthcare tenants on merchandising diversification. Leveraging disaggregated geolocation data, Placer.ai showcased how healthcare delivery in retail centers not only improves patient accessibility but also significantly boosts foot traffic and revenue. This innovative approach underscores the potential for AI in optimizing healthcare real estate, making it a pivotal focus for future strategies.
Creative Financing Solutions: The year 2023 has seen a decline in deal velocity due to high interest rates and limited capital availability. As interest rates are expected to remain elevated, securing capital will remain a challenge. In response, the industry has witnessed the emergence of innovative financing solutions such as "dequity." This inventive concept bridges the gap between debt and equity, offering landlords a creative way to navigate the current financial landscape. Our team is committed to exploring these creative avenues to support our clients' endeavors.
At Sheppard Mullin, we remain steadfast in our dedication to finding innovative solutions that address these challenges. By assisting our clients in leveraging and developing their real estate assets, we contribute to elevating the patient care experience while ensuring sound business strategies. The Connect Healthcare Real Estate Conference not only provided invaluable insights but also served as a platform for networking with esteemed industry leaders, including developers, investors, brokers, and healthcare providers. In the ever-evolving landscape of healthcare real estate, our commitment to excellence and innovation continues to drive our efforts. We look forward to embracing these key takeaways and applying them in our future endeavors, further enriching the healthcare real estate sector and, most importantly, the lives of the patients and communities we serve.