Healthcare law may help CRE sales, returns

The new healthcare reform law could affect commercial real estate.

The Supreme Court's decision to uphold the Patient Protection and Affordable Care Act may have a positive effect on the commercial real estate industry, but experts are widely split on the issue, according to

The controversial law will likely encourage a need for more personnel and space, which could mean a heightened need for property management companies to acquire properties. Furthermore, many property managers of primarily healthcare-only properties have been positive about the decision, as this could directly help them acquire more space, according to the article.

"With today's Supreme Court ruling, we expect to see a positive impact on some of our hospital clients, which could also improve trends in our on-campus medical office buildings," Debra Cafaro, CEO and chairman of Ventas, told the news source. "Healthcare and senior real estate is a fragmented, $1-trillion market, and we continue to see opportunities to expand our business."

Despite this, some industry members are not as happy about the decision, as they believe that it could hurt jobs for other aspects of commercial real estate, according to the news source. The chain restaurant industry has members who are concerned that they will lose jobs as the deadline for full implementation of the law takes effect, which is in 2014.

Some involved with healthcare real estate are not as excited about the prospects of healthcare reform when related to new properties, as the law's aspects stress financial conservation through alternative methods.

"I have never subscribed to the notion that medical office buildings would automatically benefit from the healthcare law," Jim Kornick, principal at Avison Young, told the news source. "Don't forget – the fundamental driver behind this law is to cut costs and slow the rate of health care expenditures. To me that means doing things differently. It doesn't mean doing it in brand new space."

Regardless of the many positions of industry members, now that the law has been upheld, the real estate industry will need to adjust, the news source added. This is because there are no more questions surrounding the law's implementation. With that in mind, property management companies can prepare for the possibly large adjustments to the way they do business in the next two years.

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