Doctors’ offices have been a bright spot for real estate investors during the pandemic, despite the fact that telehealth boomed during the pandemic.
Doctors and healthcare professionals have stayed on time with their rent payments over the past year, unlike other office tenants, the Wall Street Journal reported. While some tenants paid less than 85% of the rent collected, healthcare professionals paid 95% of the rent owed.
And despite a 60% drop in in-person visits at the start of the pandemic, telemedicine appointments accounted for just over 8% of visits in December, indicating patients are returning to the office.
The owners continued to invest in the area. While the sales volume of all commercial real estate fell 32% in 2020 from the previous year, $ 11.2 billion of medical office buildings were purchased in 2020. That is only slightly lower than the $ 12 billion worth of properties purchased in 2019.
Major players are now entering the field. MedCraft Investment Partners launched in January a fund of 500 million dollars which will be dedicated to the acquisitions of medical practices. Additionally, Kayne Anderson Real Estate is closing a $ 2.5 billion fund that will spend half of its fund on medical practices.
“There will be a place for telehealth in the future,” Mindy Berman, head of JLL’s health care group, told the Wall Street Journal. “But that won’t replace the need for bricks and mortar.”
[WSJ] – Sasha Jones