The world is currently facing a huge challenge that has never impacted the normal lives of people in recent history. The spread of Covid-19 has impacted the routine lives of all types of industries which in turn have disrupted the real estate segment. With the unavailability and no clear knowledge about the effectiveness of vaccines that are being discovered, the effects of Covid-19 have shown no signs of slowing down. After the series of lockdowns across the globe there was a slow opening up of all the markets but with extended layoffs, stock market collapse, and changes in the healthcare operations. In this blog, we are going to tell you the role of healthcare real estate post-Covid-19.
Impact of Covid-19 on Healthcare real estate:
- Healthcare real estate decision-making is highly slowed down with influence on leasing, construction, and disposition activity.
- The slowdown in usage and construction of traditional medical office buildings with no developments in the segment. There was redesigning and conversion of existing spaces by reopening of closed hospitals and building up of temporary facilities.
- Corporate mergers and procurement involving healthcare firms have slowed drastically. There will be a time required for appropriate price discovery even after the stability of the economy and market.
- The demand curve of the healthcare segment may be upsurged due to changes in norms. Specific states in the USA have been responding differently to the probable needs of the citizens depending on the developed healthcare facilities. Many healthcare factors have been disrupted largely due to the urgency and need for change in policies.
- Normal funding to life sciences and other non-emergency healthcare was disrupted due to the requirement bin covid-19 operations. While this seems to be temporary but the period is still not definite.
- The trend for telehealth healthcare facilities increased rapidly due to the avoidance of non-emergency visits to hospitals and medical care centers. This was mainly to minimize the exposure of medical staff and citizens to the virus. This is one of the major reasons for the impact on healthcare real estate as the usage was minimized drastically. As people saw the advantage of utilizing this feature with the aid of hospitals, this trend looks to continue a bit further.
- Medical data storage, research, and diagnostics have increased.
What Will Be the Role of Healthcare Real Estate in the Post Covid-19 Period?
It may be strange for investors to be interested in healthcare real estate with the current challenges in the segment. Hospitals and medical care centers are functioning with close financial margins as many elective surgeries are put on hold with patients reluctant to come out of homes and getting admitted to hospitals. But the canceled elective surgeries are set to resume in some time with the fear of spread and the ability to manage the infection has increased among people. The availability of vaccines in near future has enhanced the hopes of millions which is due to the fear of the second wave of the virus may emerge.
The ongoing chaos in the capital market and its huge impacts on the economy have the chances of altering the positions and plans of individual healthcare organizations. But the structural changes that are ongoing in the segment will come back to regularity in a short time.
- Healthcare will be one of the few segments that will regain employment opportunities due to the pandemic. This will be due to the requirement of medical professionals, admins, and other employees. But the location of these jobs and their longevity will be decided depending on the real-time scenario of the segment.
- Health care systems will make several tactical changes to transform their assets to work efficiently according to the latest trends and expectations of the patients. This will aid in unwrapping the finances to a great extent. There may be changes in the healthcare industry norms and compensations that make it feasible to streamline real estate by employing advanced tactics.
- Healthcare real estate has to plan smartly and transform into small and negate the unwanted investment of capital. This measure may also lead to regular possibilities for more off-campus real estate and strategy for other care delivery practices.
- Administrative employees of the healthcare organizations might be asked to work from home partially or completely involving legal, finance, marketing, back-office, and revenue-related operations. The healthcare segment may also opt for shred workplaces for effective and affordable delivery of work.
- Temporary care structures or medical offices may be reconfigured as they may be unused for several days in the week.
- Healthcare firms might come out of expensive leases or renting options and go to less expensive models to accommodate the trends in cash flow. There might be the usage of modern telehealth facilities by removing the offices that are not used.
- Include telehealth facilities in real estate where it could be useful. As people have seen the benefits of telehealth, more patients will ask for the convenience to be offered. Healthcare clinics and spaces may be restructured to meet the new requirements only wherever it is necessary. As there are constant discoveries and release of new diagnostic methods and tools, health systems have to regularly monitor their assets and give space for the latest ones that can be utilized in the wasted area.
- Many expensive assets like old diagnostic tools and storage spaces have to be outsourced to the planning partners. Healthcare firms have to analyze according to the Covid-19 model and streamline their services.
- Healthcare real estate will need to offer appropriate access to outpatient facilities. They might have to offer the latest outpatient services by developing them in highly required traffic regions.
- New patients need in preventive care and behavioral well-being has to be given appropriate space accordingly depending on the demand in the region.
If you are looking for genuine advice on your healthcare real estate needs, then associate with leading healthcare real estate investment advisor, Zeustra. They maximize profitability and minimize fixed costs with a core focus on property investments across the entire healthcare spectrum.