Connect CRE founder and CEO Daniel Ceniceros was joined by Dr. Sam Chandan professor of finance at the NYU Stern School of Business and head of the Stern Center for Real Estate Finance, to break down the factors impacting the healthcare real estate space. The conversation dives into urban epidemiology and the real estate implications of outbreaks, how interest rates are impacting the healthcare real estate space, and the “winners” and “losers” among the various healthcare real estate property types.

“When thinking about urban resilience, there is a public health angle, and cities that are more equipped and better prepared to address and respond to public health shocks ultimately are going to be more competitive and the real estate will be more valuable,” according to Chandan. 

Looking at the effects of rising interest rates on the industry, “This is the first time since the global financial crisis that we have seen inflation rise to levels that are truly worrisome for the federal reserve,” Chandan says. He notes that there is a range of different paths and scenarios that we need to be prepared for and we need to ensure the resilience of our investment and lending portfolios to those rising interest rates when they ultimately come. “The inflation we see in the market reflects a convergence of a couple of things, certainly supply chain disruption that is related to the pandemic, some of that being related to the constraints on the availability of skilled labor, some of it having to do with the way in which we consume.” Chandan added that during the pandemic, there has been a shift in consumption away from services and in favor of goods. Americans have been buying more hard goods, and experiences like travel, concerts, and eating out have largely been put on hold.

We are in a time of significant and rapid change for commercial real estate, overall. There is an importance and value placed on the spaces that benefit the wellbeing of our aging population and the desire for people to live well provides a strong outlook for healthcare real estate. Spaces will be used differently going forward, but physical colocation will remain a critical element of the way in which we engage with one another to ensure better health outcomes, which will bode well for the sector.

Watch the video above for the full conversation and hear more from Dr. Chandan during his keynote presentation at the Revista 2022 Medical Real Estate Investment Forum on March 3 & 4 at the Loews Coronado Bay Resort in California.