Healthcare providers look for ways to make patient care more convenient and cost effective 

Healthcare Trends

Commentary by Coy Davidson

Despite the constant uncertainty associated with the healthcare sector, the Houston healthcare real estate market continues to demonstrate solid market fundamentals with resurgent job growth in the healthcare sector. Houston’s robust construction activity and steady leasing activity aids healthcare providers to continue to implement strategies making patient care more convenient and cost-effective.

Healthcare Employment Resumes GrowthQ2 2018 Houston Healthcare Market Indicators

Healthcare providers nationally remain under pressure to reduce costs and as a result, staff reductions have been necessary. The Houston healthcare sector posted a net loss of 1,400 jobs in 2017, the only annual loss recorded in the last 25 years.

In May, Bay Area Regional Hospital located in Webster Texas, ceased operations and filed for bankruptcy protection, laying off 900 employees.

However, Healthcare employment has rebounded in the Houston MSA adding 3,400 jobs in the second quarter of 2018 pushing midyear employment growth to 4,000 jobs.

TMC3

The Texas Medical Center (TMC) in Houston is the largest medical complex in the world at a total of 1,345 acres and 50 million square feet of developed space and over 60-member institutions and it is projected to get even bigger with a major life sciences initiative.

TMC is developing a new biomedical research hub that will cluster researchers and industry experts together on a collaborative 30-acre campus. Groundbreaking for TMC3, the new campus, is expected to begin in 2019 with completion slated for 2022 adding approximately 1.5 million square feet of research space to the TMC campus footprint.

Five institutions —Texas Medical Center, Baylor College of Medicine, Texas A&M University Health Science Center, University of Texas Health Science Center at Houston and University of Texas MD Anderson Cancer Center — are combining forces on the new TMC3. The new campus alone is expected to have a 5.2 billion dollar impact on the city of Houston and create a projected 30,000 new jobs.

Investor Activity

Investors are increasingly viewing medical office buildings (MOB) which have demonstrated more stable occupancy rates than other real estate asset classes as an increasingly attractive investment opportunity. Despite a complex and challenging healthcare landscape, in the long-term, investors foresee a healthcare delivery system in the U.S. that is going to continue its shift to outpatient settings. 2017 was a record year for MOB investment volume nationally and the momentum has continued into 2018.

Houston with its reputation as a dynamic healthcare city, with a stable economy and growing population, remains a favored target market among healthcare real estate investors. 

MedicalCenterNRG

 

 

TMC is home to the World’s Largest Children’s Hospital, Texas Children’s Hospital & the World’s Largest Cancer Hospital, MD Anderson Cancer Center.

 

Houston Healthcare Industry In The News

Aerial_of_Texas_Medical_Center_with_Downtown_Houston_in_the_background

According to the 2018-2019 report from the Center for World University Rankings, six Houston-area universities and medical schools ranked in the top 500 universities in the world.

For details, visit http://cwur.org/2018-19.php CWUR

 

Mid-Year 2018 Houston Medical Office Highlights

Q2 2018 Houston Healthcare Infographic550

 

Q2 2018 Houston Healthcare Front Page Screenshot

 

 

 

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