©2024 Real Estate Publishing Corporation July 2024 • VOL.24 NO.3
Finalists and Winners: Page 26
Checking the pulse of Illinois’ healthcare sector: Aging population, partnerships drive growth in market By Brandi Smith
NAI Hiffman is the exclusive leasing agent for The York Health Center, a build-to-suit opportunity at 1800 S. York Road in Oak Brook, Ill.
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nlike more cyclical sectors such as office or retail, healthcare and medical office development through Illinois hasn’t experienced a significant downturn, largely because of its underlying fundamentals, which are bolstered by the rising demand from the aging baby boomer generation. “Now, the challenge for providers is meeting the increasing demand for medical services in today’s high-cost environment,” said John Wilson, President of HSA PrimeCare. Research from Colliers indicated that nationally, the medical office sector continues to boast low vacancy rates and record-setting asking rents. However, elevated
construction costs and disruptions in the capital markets have led to a noticeable decline in sales volume.
that help compensate for less-profitable offerings like primary care.
“Some solutions include establishing joint ventures with other service providers, teaming up with real estate companies to build outpatient developments or finding alternative ways to capitalize projects,” said Wilson.
Despite its mostly promising outlook, the sector does face several challenges according to Colliers, including workforce deficits, supply chain issues and the complexities of coordinating post-acute care. Staffing shortages, exacerbated by low unemployment rates and the retirement of specialists, present significant obstacles. Additionally, rural healthcare access remains a critical issue, with many facilities consolidating or closing, forcing patients to travel long distances for care.
As an example, he shared that hospital systems, along with their developer partners, may need to bring more equity to the table in order to fund projects. “It’s challenging to provide primary care and make money,” Wilson said, noting that hospital systems, on the other hand, offer a wide range of specialty services
HEALTHCARE (continued on page 10)