June 21--HOUSTON -- Don't tell the pundits, or a significant portion of Congress, but the Affordable Care Act is not only the law: Obamacare is a done deal, to hear some real estate executives tell it.
It's a real estate deal -- a 674-million-square-foot real estate deal -- according to The Counselors of Real Estate, based in Chicago, and its 2014 Top Ten Issues Affecting Real Estate.
Health care, specifically the Affordable Care Act, was No. 4, behind energy, jobs and the Millenials. Health care was ahead, in descending order, of globalization, water, capital markets, housing, manufacturing and agriculture.
The list of issues -- those expected to affect property markets over the next 10 to 30 years -- reflects the thinking of 1,100 members representing 50 specialties, and was presented at the National Association of Real Estate Editors conference in Houston.
Considering the tone of most online and cable commentary and the unified opposition of Oklahoma's state leaders, such an unemotional presentation on the subject was a complete surprise.
Hey, all I know is what I read in the newspapers. And on
Here's the lowdown, from Hugh F. Kelly, Ph.D, 2014 chairman of The Counselors of Real Estate and clinical professor of real estate at New York University's Schack Institute of Real Estate:
"The large number of newly insured people under the Affordable Care Act will require 674 million square feet of newly constructed health care facilities. Health care providers will increase market share by constructing specialized consultative care or ambulatory facilities, in nonurban locations within close proximity to consumers, enabling wide-ranging services to be provided at a considerably lower cost."
"Changes associated with increased operating costs, physician alignment, new branding, access to care and investment in updated technology platforms are forcing consolidation of existing health care organizations. Large employers like IBM, Kmart, Walgreens, Lowe's and Walmart are contracting with 'Health Care Centers of Excellence' such as Cleveland Clinic, M.D. Anderson and John Hopkins. In some cases, clinics are actually being built on the campuses of the company itself."
"The impact on real estate is enormous. Mergers and acquisitions are creating excess properties while simultaneously increasing demand for newer updated facilities. Satellite ambulatory centers, urgent care clinics and diagnostic centers are being built within an acceptable radius of the core facility. Monetizing noncore assets is creating much needed capital for hospital expansion and the funding acquisition of new technology and equipment. A recent trend for health care access is the creation of medical malls -- a concept that is gaining traction nationally."
All of it together, Kelly said, will prompt development of new kinds of healthcare-related space, different kinds of housing and expanded retail centers -- and clinics in shopping malls.
"Hold on to your stethoscope. We're in for quite a ride," he said.
Depending, of course, on what happens in November.