Americans 65 and Older Likely to Drive Commercial Real Estate (Particularly in the Medical Sector)

It’s mind boggling to think that in 2013 alone, around 1.3 million Americans will turn 65. This represents the largest rise in the senior population in over 50 years. The truth is, the trend is only picking up speed and will continue to increase at a rapid rate through 2025.

young male doctor

As the population ages, the need for easy access to top-rated medical care will grow. Wise investors will look toward medical real estate in the coming years.

With all those Baby Boomers reaching retirement age, to say the U.S. economy will be impacted is a gross understatement. Naturally the cost of Social Security and health care will escalate. Consider also that the buying power of aging Americans will likely take a hit due to vast numbers relying on meager retirement funds and Social Security. Then consider all of the goods and services that older individuals will need most. You can bet it’s not something you’ll find through Pinterest, Best Buy, or Hammacher Schlemmer! In addition to one-stop shopping, convenience, and trusted brands they’ve known for years, America’s senior citizens will be pumping their dollars into the health care sector.

Savvy marketing execs and investors are hungrily eyeing which of the nation’s medical meccas will benefit the most from the excess of senior dollars that will inevitably be thrown their way. It is a sad but true fact that aging Americans are not exactly in the best of health. They are unfortunately plagued with heart problems, orthopedic issues, cancers, and a range of difficulties brought on by obesity. Over the next few decades, the fields of medical care and research will have to grow by leaps and bounds to keep up with the inflated demand.

Of special interest to those looking to profit from this phenomenon include identifying where large groups of seniors or soon to be seniors live, and tracking down favored spots for high-income retirees. They are more likely to seek out areas for relocation based on the level of medical care and they have more disposable income for services. Cities with top-ranked medical schools, nursing schools, and research facilities are predicted to be future hot spots for residential and commercial real estate.

The commercial real estate company, CoStar Group, recently ran an article on their website, entitled, “Turning Grey Into Green.” The article discussed the fact that in some U.S. cities, “hospitals have already become very visible engines of economic growth.” Boston, Chicago, and San Francisco were mentioned as locations where the current and future demand for living space and upcoming medical facilities is having a huge impact on the real estate and construction markets. The article’s author acknowledged that these demographic trends have not even scratched the surface in terms of demand, which makes their growth potential exciting to say the least.

Smart investors should definitely look away from the traditional single-family market and focus instead on properties and land in close proximity to medical institutions. The CoStar article revealed that economic growth based on the presence of medical goods and services, “may already be impressive in areas such as Mission Bay-San Francisco, Longwood Medical Area-Boston, and Streeterville-Chicago.”

To read the entire article and see graphs detailing projections for Health Care Employment Growth and Health Care Power Growth, please visit this link: http://www.costar.com/News/Article/Turning-Grey-Into-Green/149260

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