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Transwestern’s Johnson: Obamacare Reform Uncertainty Not Slowing Medical Real Estate

Eric Johnson of Transwestern, Alan Whitson, president of Corporate Realty Design and Management Institute and Ralph Bivins, Realty News Report,  discuss real estate at the Texas Healthcare Real Estate conference.

Eric Johnson of Transwestern, Alan Whitson, president of Corporate Realty Design and Management Institute and Ralph Bivins, Realty News Report, discuss real estate at the Texas Healthcare Real Estate conference.

HOUSTON – The “repeal and replace” Obamacare health insurance discussions under the Trump administration have not slowed down activity in the healthcare industry, says Eric Johnson, national director of Transwestern’s healthcare advisory group.

Johnson made the observations at the recent Texas Healthcare Real Estate 2017 conference in Houston.

A panel discussion on healthcare real estate included Alan Whitson, president of Corporate Realty, Design & Management Institute and Ralph BIvins, editor of Houston-based Realty News Report.

Years ago, healthcare industry delayed decisions about expansion and capital spending because of the uncertainty surrounding the Affordable Healthcare Act, which was passed in 2010.

Eric Johnson, national director of Transwestern's Healthcare Advisory Services Group.

Eric Johnson, national director of Transwestern’s Healthcare Advisory Services Group.

Even though there are a lot of unknowns currently, as healthcare reform is proposed and discussed in Washington, this time the healthcare industry seems confident enough to move ahead with expansion plans and transactions, Johnson said.

Today’s “repeal and replace” initiative has not halted decision making, said Johnson, who oversees Transwestern’s healthcare activity around the nation.

In some respects, however, the medical real estate market has been remarkably stable in recent years. The occupancy rate at the nation’s investor-owned outpatient buildings has been largely unchanged since the Great Recession ended. According to the Revista organization, the occupancy rate for these buildings rose from 91.4 percent in the fourth quarter of 2009 to 92.5 percent by the third quarter of 2016.

In Houston, the expansion into the suburbs has been rapid as hospital systems have opened new facilities to keep up with population growth. According to the U.S. Census Bureau, the greater Houston area gained 159,000 in population in 2015 and the area has a population of 6.7 million.

The Houston area population is aging, increasing the probability of a growing demand forhealthcare services. Houston has led the nation in population growth over the last five years, according to the Census Bureau.

Ralph Bivins, editor, Realty News Report.

Ralph Bivins, editor, Realty News Report..

Hospitals must expanded into the various suburban markets – The Woodlands, Katy and Fort Bend County – to have complete coverage areas and maintain market share, Johnson said.

Houston has more than 5 million square feet of medical related construction – hospitals and medical office buildings –  currently under construction, according to Transwestern.

Feb. 27, 2017 Realty News Report Copyright 2017

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