Creative Capital Solutions for the Healthcare Industry
INVESTMENT AND MANAGEMENT PROCESS
OPPORTUNITIES IN HEALTHCARE
Favorable Trends in the Healthcare Sector
Healthcare is the largest single industry in the United States economy and healthcare spending continues to rise at the fastest rate in history. Total healthcare spending in 2008 represented approximately 17% of GDP and is expected to reach 20% by 2017. The aging of the American population, the wide availability of private and public reimbursement programs, and advances in medical technology all contribute to the increasing demand for healthcare services and the facilities necessary for their delivery.
Approximately one-third to one-half of healthcare organization assets typically consist of land and buildings. In these times of escalating costs, the healthcare industry is increasingly faced with capital pressures, prompting new approaches and the need to rethink their real estate strategies. Healthcare systems have begun to monetize their non-core real estate assets through financings, sale-leaseback structures, joint ventures, operating leases, ground leases, development and fee simple transactions with third parties. These steps add cash to the organization’s balance sheet strengthening the debt capacity needed to fund core capital projects.
Benefits of Healthcare Properties
From an investment standpoint, healthcare properties have many desirable attributes that mitigate risk and optimize returns. These attributes can include:
- Low tenant turnover
- Institutional tenant(s) with strong credit
- Proximity to neighboring hospital(s)
- Personal guarantees from physician tenants
- Significant tenant capital commitment
- Staggered lease expirations
- Long term leases
- Low vacancy rates
- Limited investor competition
- Development constraints
Norvin Properties and Healthcare Real Estate
Since 2001, Norvin Properties has concentrated on investment properties serving the healthcare industry, assembling a portfolio in excess of 1,000,000 square feet to date. Currently, we are one of the largest for-profit owner of healthcare properties and unimproved land in the Texas Medical Center – the largest medical complex in the world.
Through its strong network of relationships with hospitals, banks, consulting firms and real estate brokers specializing in healthcare, Norvin has significant access to desirable healthcare real estate investment opportunities, and in many instances has purchased healthcare properties on an “off-market” basis.
In an otherwise unpredictable market, healthcare real estate promises long-term growth. Norvin Properties believes that we are at the forefront of this uniquely promising sector for its Investors.