Rx for commercial real estate investors: medical office space
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Commercial real estate is currently in the tank. While residential sales are slowly creeping upward, commercial real estate sales are lagging. Cities all over the country are reporting larger than ever vacancy rates, with the national average standing at close to 16%. It is interesting to note that in Beijing, the vacancy rate is hovering around 23%.
Reuters recently noted that during the 2nd quarter of this year, commercial real estate activity in the US slowed to its lowest level in 15 years. Much of this is due to recession, job loss, and lack of demand for goods and services. This low level of activity is likely to last through the first 2 quarters of next year; Lawrence Yun, principal economist for the National Association of Realtors, suggests that recovery may be as far off as the last half of 2010.
However, there is a continuing bright spot in commercial real estate, and that is in medical office space. The main reason for this is that everybody needs health care. Also, our population ages, there continues to be more demand for doctors and medical facilities that closer to the residences of these aging seniors.
