Global Real Estate Investment - Orbvest Specialized Investment

WHY CONSIDER MEDICAL OFFICE BUILDINGS AS AN INVESTMENT?


Over the last few years there is increasing interest in the commercial real estate segment referred to as medical office buildings, or MOB. Reports like the DLA piper market survey for 2018 rated the specialized healthcare investment sector most attractive for investors, with a 56% approval rating by investors, but our hypothesis is that the sector is going to continue to get healthier over the next decade and beyond.
What is specialised health care, what are MOB’s and why should I invest in them?
Medical office buildings are usually smaller specialised buildings used by independent medical practitioners, specialists, specialists’ services including imaging, pathology, dialysis, oncology, senior care, step down, day hospitals and a plethora of new service providers emerging as a result of advancement in technology. Traditionally these service providers don’t have the overhead of full-service hospitals and provide a more personal, localised and patient-centric service to their community.
It is a sector that is growing as a result of disruptive technology that is moving patients out of the traditional hospital networks to more convenient and cost-effective treatment that is now available in a medical practitioners’ rooms near you.
“We are on the brink of a revolution and an unprecedented rise in personalized and intelligent health care. Transformative technologies, genome sequencing and artificial intelligence amongst others bring incredible power to diagnostics, drug discovery and genetic therapy, and will have a major impact on longevity and the required aged care facilities. We are well positioned to be the preferred provider of new generation healthcare infrastructure – Hennie Bezuidenhout, Investment Committee Chairman and Founder of Orbvest Ltd South Africa.
This sector is also backed by demographic growth and an increasing number of seniors requiring healthcare. Put simply, people in the US over 65 years old visit a doctor 4 times more often than younger populations, and more than 10 000 baby boomers are turning 65 every day. The U.S.A alone is expected to double its number of senior citizens older than 65 years by 2050.
Generally, medical practitioners are good quality tenants who are often supported by large government healthcare funding and medical insurance companies, therefore they typically have solid financials and statistically are less likely to default.
Medical tenants are mostly well diversified in medical buildings and are highly unlikely to leave since they require specialized infrastructure and equipment and they are dependent on one another to provide inter-related services to patients; therefore, they typically sign long-term leases allowing them to remain in one location. With medical facilities being so well regulated and specific in their requirements, that as a place of permanence within rental circles, you would struggle to find more reliable tenants.
‘In all the time I’ve been doing medical office suites and day-hospital development in Africa, I’ve never had a day’s vacancy,’ says Hennie Bezuidenhout.
MOB’s are mostly situated in highly sought-after centralized locations, downtown areas or adjacent to other medical centers or hospitals, but increasingly the demand is being created in the suburbs where they are convenient and accessible. If you need Dialysis 4 times a week you would prefer a local facility near your home than to travel to the hospital downtown. According to the US Centre for Disease Control, people under the age of 64, tend to average 3 doctors visit per year; whereas people over the age of 65, average nearly 7 visits per year. Older people tend to have more doctors and specialists they need to visit. It’s not uncommon for a retiree to see 3 or 4 doctors in a day, or week, making convenience important.
In summary, the healthcare space is changing at an accelerated pace, driven mostly by the advancement of technology, the growing ageing population across the world, and the demand by communities for a more patient centric care delivery model.
OrbVest has invested heavily in understanding this category and are growing our reputation as a global expert in the sector of medical real estate.
With proven management capabilities and highly experienced partners, we have already gained the trust of our investors by consistently outperforming their expectations. Our performance speaks for itself considering that 65% of our investors re-invest with us.
Since launching our first medical building in Oak Hill Park, Atlanta in August 2014, we have assembled an enviable portfolio of 19 medical buildings in the USA, to bring the real estate under management to in excess of $200 million, and equity raised to date of $58 million. We project that the pipeline under management by 2021 will top $500 million.
We aim to achieve the highest returns possible for our investors to maximize each opportunity presented to us. Our dividend distribution to investors is our key metric and we are proud to have paid out US$ 725 009 in dividends to our investors during the last quarter.
 
To find out more on our current medical investment opportunities visit www.orbvest.com or contact one of our investment consultants on 021-948-2130 or at support@orbvest.com.

“This article was written by the OrbVest editorial team


 



 

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