MIAMI MEDICAL OFFICE MARKET REPORT

The Miami – Dade County Medical Space market and healthcare industry were impacted by the COVID-19 pandemic in 2020 into 2021. Despite the downturn in the economy, the employment of health care workers rebounded much more rapidly than the broader job market, and medical office properties were more insulated from the sharp declines in demand for most other property types.

• Healthcare jobs fell by as much as 6.4% in 2021, but a return to growth is expected over the next five years.
• Medical office buildings are expected to see a strong rebound in demand this year once the COVID-19 virus recedes. Developers and investors are growth opportunities with pricing and sales transaction levels more resilient than for most property types.
• While remote patient visits and telehealth will clearly play a greater role in health care, its impact on medical offices is likely to be negligible.

The U.S. health care industry was severely impacted by the COVID-19 pandemic in 2021 as patient visits declined by more than 50%. Health care employment fell by as much as 6.4% in 2021 but rebounded much more rapidly than the broader job market.

By contrast, medical office building sales fell by a relatively mild 12.7% in 2021, but are expected to see a strong rebound in demand this year once the COVID-19 virus recedes. Investors are sensing good growth opportunities with pricing and sales transaction levels more resilient than for most property types.

While telehealth will clearly play a greater role in health care, its impact on medical offices likely will be negligible. Although COVID-19 has impacted the health care industry more broadly, we expect a potential return to pre-pandemic trends this year that will lead to new opportunities for owners and investors.

Few industries have created as many jobs with such stability over the long term as the healthcare industry. In 2021, however, even healthcare suffered job losses, along with nearly every other sector of the economy. By the end of Q2 2021, U.S. health care employment had declined by 6.4% year-over-year, less than the 11.2% drop for the broader U.S. economy. The drop in health care employment was partially caused by patients’ COVID-related reluctance to schedule routine visits and by government mandates limiting elective procedures. Health care employment has been increasing since mid-2020 and by Q4 2020 was down by only 1.5% year over-year versus a 6.0% decline in total U.S. employment. While job growth is expected to resume in 2021, uncertainty will prevail for the next several months as demonstrated by a mild drop in health care and social assistance employment in January 2021.

Expect the long-term, outsized growth of U.S. health care to resume this year. The remarkable stability of U.S. health care employment (Figure 2) was briefly interrupted in 2021, but a return to secular, stable growth is expected over the next five years.