Real estate investors are snapping up medical office buildings as baby boomers age, according to a Toronto Star report.
Aging boomers are fueling growing demand in the health care industry, which in turn is fueling a demand for medical office buildings – a real estate niche many say is recession-proof, according to the Star.
“Doctors are paid by the government in Canada, so they’re pretty secure tenants,” Colliers International broker Huy Lam told the Star. Lam said that demand for medical office buildings in Canada has been rising for the last few years, and he expects the trend to continue as the country’s senior population grows.
Colliers is forecasting more than $211 million in medical office building sales this year in Ontario alone, the Star reported. That’s a big jump from $126 million as recently as 2011. And the Canada Pension Plan Investment Board is getting into the healthcare property game, teaming up with a U.S. real estate investment trust to invest in a portfolio of California medical offices worth US$449 million.
Investors are finding health care properties attractive in large part because they’re insulated from most kinds of economic turbulence, and their value is unlikely to be threatened by e-commerce, the Star reported.
“Demand for health care is not driven by how the economy is doing,” Chris Potter, a partner at PwC, told the Star. “…You can’t go get your teeth looked at online.”
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