Healthcare Real Estate Transactions and New Construction
$1 Billion Hospital Campus to Serve As Centerpiece of Remade Landmark Mall in Alexandria, Virginia
Foulger-Pratt to redevelop the 52 Acre tract into a walkable urban village to include medical office buildings, multifamily units, retail, commercial, and entertainment offerings. At the heart of the redevelopment project is a new $1 Billion hospital and medical campus for Inova which would replace nearby Alexandria Hospital and employ roughly 2,000 health care workers. The $2 billion proposal also calls for affordable housing, outdoor parks, a new fire station, and a transit hub that would anchor the city’s proposed bus rapid transit network, DASH, and Metrobus. Construction at the site could begin as soon as 2023, with the first buildings potentially opening in 2025.
CaroMont Health Kicks Off Construction for New Hospital, Medical Campus in Belmont (N.C.)
The CaroMont Regional Medical Center – Belmont is set to open in mid-2023. On 28 acres, the campus will include a 66-bed hospital, 16-room emergency department, labor and delivery unit, operating rooms and surgical capabilities, and diagnostic testing and imaging services. A medical office building and parking deck are also part of the plan. Estimates show the hospital could take as many as 16,000 patients in the first year and, in addition, create 150 new jobs. The project will also offer educational opportunities for students in Belmont Abbey College’s health science programs.
Hospital Chain Will Lease Part of Former Toys “R” Us in Eatontown, New Jersey
Edison-based Hackensack Meridian Health has committed to 45,600 square feet for an outpatient facility and urgent care center serving Central New Jersey at the Monmouth Plaza shopping center located at 133-137 Highway 35 in Eatontown, New Jersey. The new Hackensack Meridian location, slated to open in the second quarter of 2022, was cobbled together from the 80,592-square-foot shopping center’s closed Eastern Mountain Sports and DSW stores and a portion of a closed Toys “R” Us.
Real Estate Economy Trends
Prices Rise Faster Than Expected in June for Both Consumers and Businesses
Federal Reserve Chairman Jerome Powell continued to emphasize that inflation is transitory during his testimony to the House Financial Services Committee last week. However, he also admitted that inflationary effects have been larger and more persistent than expected. While there are signs that current inflation pressures are generally tied to the aftermath of the pandemic, longer-run forces might shift the economic landscape and merit some consideration. Powell’s testimony came a day after the Bureau of Labor Statistics released its consumer price index report for June, which showed the headline figure growing by 0.9 percent — the highest month-over-month number in 13 years. Combined with the previous three months, when the consumer price index grew by at least half a percentage point each month, inflation has grown by 2.9 percent over the past four months — an annualized rate of 8.7 percent. The less-volatile core inflation index, which excludes food and energy, also grew by 0.9 percent in June.
Pinnacle Real Estate Group Assessment
The Inflation Factor in Healthcare Real Estate
There continues to be more than the usual amount very large real estate transactions, hundreds of millions to more than billions of dollars, within the healthcare industry the past few months at unprecedented market terms which has generally accelerated, if not inflated, the values. As indicated in last month’s newsletter Assessment, we believe this trend will continue through the end of the year or until the expected pending inflation begins to become a reality. With the recent information shared by Federal Reserve Chairman Jerome Powell and Bureau of Labor Statistics released its consumer price index report for June, mentioned above, it seems that inflation is a foregone conclusion, and the last remaining question is, when will it, inflation, start effecting the markets, including healthcare? The current aggressive healthcare real estate market seems like a frenzy before inflation hits, which there are indications that has factored into the current situation. Because of that, our current assessment is that this aggressive trend, specifically in the healthcare real estate market and somewhat created by the perception of pending inflation, will continue for the foreseeable future and beyond any potential impact of inflation. The reason being the momentum the healthcare real estate market has established the past year combined with the reaction to the country and world reopening after the Pandemic should maintain the path regardless of potential inflation effects.
Christopher Louis, ASA, MAI