Aging Baby Boomers Will Drive Demand for Healthcare Properties Over Next Decade, Grubb & Ellis Repo...(percent in 2007. The 65 and over age ...),Health

The 65 and over age group is projected to grow 36 percent between 2010 and 2020 compared with 9 percent for the general population, according to the U.S. Census Bureau. Members of this age group are more frequent users of medical services, according to the National Ambulatory Medical Care Survey, which gathers information about the healthcare provided by office-based physicians.

Individuals 65 to 74 made an average of 6.5 visits per capita physicians' offices in 2005 compared with 3.3 visits per capita for all age groups, the survey said. The 75 and over age group made an average of 7.7 visits per capita. Meanwhile, the average number of visits per capita for all age groups increased from 2.7 in 1985 to 3.3 in 2005, suggesting a rising propensity among all consumers in general to access healthcare services.

According to data from the American Hospital Association, the number of hospital beds in the U.S. fell from just over 1 million in 1982 to 808,000 in 2004, while the number of beds per 1000 population declined from 4.37 to 2.75, an indication that consumers are increasingly accessing healthcare services in outpatient settings such as medical office buildings and freestanding clinics.

Venture capital spending for healthcare-related products and services hit an all-time peak in 2007, both in absolute terms at $9.5 billion and as a share of total venture capital spending at 32 percent, according to the PricewaterhouseCoopers, National Venture Capital Association: MoneyTree Report.

These factors will propel growth of health-related occupations at about twice the rate of general employment growth over the next decade, and in turn, generate tenant and owner-user demand for medical office space and other types of healthcare properties.

The capital market fundamentals for medical office space were very favorable until the global credit markets seized up in August 2007. However, despite the turmoil in the credit m
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