Aging Population Continues to Grow Medical Office Market
- Overall demand for medical office space in Columbia, SC continues to increase despite uncertainty arising from the Affordable Care Act (ACA). Aging baby boomers and growing number of insured individuals is growing the demand for healthcare services.
- Healthcare employment is on the rise in South Carolina and the Columbia, SC MSA.
- The vacancy rate for the Columbia, SC medical office market was down to 7.9% at mid-year 2015 from 8.2% at year-end 2014.
- Overall average asking rental rates are steady at $20.37 per square foot per year.
- Hospital mergers, acquisitions and expansions increase as smaller hospitals struggle to keep up with changing healthcare dynamics.
Changing Healthcare Trends
While demand for healthcare real estate remains strong throughout the United States, space requirements and healthcare trends are changing. Healthcare system and physician acquisitions, consolidations and alliances are accelerating due to stronger competition and certain policies implemented by the Affordable Care Act (ACA). For profit hospitals are placing increased pressure on performance by all healthcare providers. Advancements in technology are allowing for more collaborative and open medical offices. Clinics are located in the suburbs, off hospital campuses providing greater access and ease to patients. The aging baby boomer population is generating a greater need for healthcare services while the millennial generation is shaping the future of healthcare services. Easier access to healthcare is allowing more people to obtain insurance coverage than ever before resulting in more doctor visits and healthcare demand.
Additionally, hospital visits are declining as more procedures are being performed in an outpatient setting. Primary care clinics and urgent care clinics are shifting towards retail-type settings and locations, creating competition among clinics while offering patients more choices and convenience.
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