1、Research2022 Healthcare and Medical Office PerspectiveUnited States|20222|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.The pandemic,its aftermath,and current macroeconomic conditions have created a perfect storm of challenges for the healthcare i

2、ndustry.Costs are increasing,reimbursements are decreasing and the labor shortage persists.These challenges,compounded by disruption in the industry and uneven patient volumes,further compress razor-thin hospital margins,leaving healthcare systems under increasing pressure to cut costs.Despite these

3、 pressures,healthcare is a vital industry that continues to expand,as does its leased square footage.Medical office buildings have seen relentless demand and remain one of the most resilient commercial real estate property types.Investors have come to view the sector as a critical alternative asset

4、class.This years healthcare real estate perspective looks at several key themes impacting healthcare systems and medical office owners and operators:1.Margin pressures are driving healthsystems to cut costs through creativereal estate strategies2.Disruption is mounting as newentrants to the industry

5、 create morechoices for patients and competitionfor traditional providers3.Systemness is an increasingly favoredstrategy to consolidate and managecosts while expanding patient access,particularly in new markets4.Medical office building demandremains high,providing investors withstability amid volati

6、lity in traditionalcommercial real estate classes3|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Health system margins face higher cost pressures than ever before.CFOs cite labor challenges,supply chain issues,inflation,capital costs and pending s

7、hifts in the payor mix among their headaches.These obstacles and many others are driving the margins of some systems into the red.Margins have been in the negative throughout 2022,according to Kaufman Halls Monthly Operating Margin Index,a sampling of budget data from 900 hospitals and health system

8、s.The CARES Act brought some cash-flow relief,but in 2022,new COVID-19 variants at the beginning of the year were exacerbated by labor challenges,cost inflation of goods,a small decline in patient volumes,and reduced lengths of stay.Margins are projected to improve somewhat as elective procedures,st

9、alled in many phases of the pandemic,increase.Narrowing focus to the top 150 largest health systems,The Academys Leading Health System(LHS)index posted a quarterly average operating margin of-0.7%in the first quarter of 2022.Margins are expected to reach 2.3%for 2022 as a whole.But thats still lower

10、 than the 3.5%operating margin average before COVID-19.Unsurprisingly,cost cutting is more of a concern now than it was in pre-pandemic,pre-downturn halcyon days.In 2021,only 27%of LHS CFOs said they were planning to decrease operating budgets.Only a year later,that number increased to 75%,according

11、 to The Academys survey.1.Under pressure:financial and costchallenges put margins in a squeezeMargin pressuresLabor expenses and challenges from COVID-19 resurgence caused sharp decline in hospital operating margins in 2022Kaufman Hall Operating Margin Index YTD by monthSource:Kaufman Hall!#$%&()$*&

12、(+,-&(./0&(123&(4,/&(#56&7,8&95:&)-:&95;&#$6&=&!4|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Healthcare systems and providers are facing persistent talent shortages that are slimming margins.According to the U.S.Bureau of Labor Statistics(BLS),

13、one in five healthcare workers quit during the pandemic,resulting in a sharp uptick in unfilled healthcare job postings.The BLS projects that there will be roughly 203,200 vacancies for registered nurses every year until at least 2030.Labor accounts for 55%of a healthcare systems operating costs and

14、 those costs are rapidly increasing.From January 2019 to March 2021,the median per-patient labor expense increased by 37%,according to Kaufman Hall.Amid chronic under-staffing,healthcare systems are paying higher wages to attract and retain nurses and employing expensive contractors to fill gaps.Lab

15、or market challenges persist1 in 5 healthcare workers have quit since February 2020Job postings have increased by 96%over the same period15,00016,00017,00018,00019,00020,00021,00022,000-11%-9%-7%-5%-3%-1%1%3%Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17Jan-18Ju

16、l-18Jan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22Employment,thousandsEmployment growthHealth Care and Social Assistance employment05001,0001,5002,0002,500Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Health Care and Social Assistance job openings(

17、thousands)Source:BLS5|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Increase in Medicare-eligible baby boomers will shift payer mix towards governmental sources over the next decadeSource:CMS,“Table 17:Health Insurance Enrollment and Enrollment Gr

18、owth Rates,Calendar Years,2012-2028,”National Health Expenditures.Estimated percentage of the insured population from governmental funding sources(including Medicare,Medicaid,and CHIP)19%growth37%201244%2028More patients on Medicare and Medicaid compresses marginsThe Baby Boomer population continues

19、 to age into retirement,gaining access to Medicare benefits.As a result,a projected 2 million new people will enroll in Medicare annually through 2028.With this increase,and increased Medicaid enrollment,government-sponsored healthcare coverage will grow by a projected 19%through 2028.Rising enrollm

20、ent in Medicare Advantage plans are a key component to controlling increased costs from an aging population.In 2022,48%of those eligible for Medicare were enrolled in a Medicare Advantage plan,and this is expected to continue to increase.Under a Medicare Advantage plan,the government pays a fixed fe

21、e per enrollee to the insurer,who is then financially motivated to improve health outcomes to reduce costs.Efforts to control costs continue to drive a shift in reimbursement within the industry toward outpatient care.Outpatient facilities are less expensive to develop and operate.However,health sys

22、tems must reduce or repurpose stranded,higher-cost inpatient space to truly impact their margins in a positive direction.Enrollment in Medicaid ticked up at the onset of the pandemic and has remained elevated,primarily due to government programs that were introduced and then extended.There were 18.2

23、 million(25.6%)more people enrolled in Medicaid in June 2022 than in February 2020,according to the Kaiser Family Foundation(KFF).Medicaid rates are predetermined and generally fall well below Medicare rates,which are well below commercial insurance rates.While other factors influence how much healt

24、hcare systems ultimately get paid,a higher percentage of Medicaid and Medicare patients typically hurts margins.6|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.!#!$%&(%)*%+*%,%$+-%+-%*+%)+%(+.%+.%(+)%)+)%,+/%/+/%,+&%/+$%-+$%/+$%(01234561789!#:;#=B

25、!#01234561789!:;8=&+-+&Medicaid patients made up 18.4%of insured in 20211.https:/www.kff.org/coronavirus-covid-19/issue-brief/what-happens-when-covid-19-emergency-declarations-end-implications-for-coverage-costs-and-access/Percentage of people by type of health insurance coverageMedicaid enrollment

26、had increased 55%year-over-year as of MarchCumulative change in Medicaid/CHIP enrollment since February 2020!#$%&(!#$%$&(#$%)*+,)-&./0100/2123/3143/.15./3156/.17/8157/214/419/.185/31)*+,&#-./+,0.:;&)#?*&AB,&-#?+,-$*&C,D&#(-&EFGHIF:)*+,%10#2+,0.C&A-,&C&A-AJI%)A%HKICLJIWhat happens when the public hea

27、lth emergency ends?1Most Medicare beneficiaries will lose access totelehealth coverage and services 151 days afterPHE expiration(unless in rural areas orenrolled in Medicare Advantage)Medicare beneficiaries will again need tosatisfy the 3-day prior hospitalizationrequirement to have Medicare coverag

28、e ofSNF staysIts up to the states to:Facilitate access to Medicaidand/or CHIP coverageExpand long-term services and supporteligibility and benefitsSupport providers,most commonlyby increasing provider payment ratesand making retainer paymentsIncrease beneficiary accessto medicationsIncrease access t

29、o telehealthSource:Kaiser Family FoundationSource:U.S.Census Bureau7|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Benefit renegotiations are set to be contentious this year as inflationary pressures put a new focus on private payer rates.With a h

30、igher percentage of reimbursement coming from Medicare and Medicaid,health systems will continue to seek to recoup additional revenue outside of these fixed rates from private payors.And as with Medicare and Medicare Advantage,insurers are also pressing for site-appropriate care,pushing services fro

31、m inpatient to outpatient or home-based care.Health systems and hospitals are looking to increase their prices by 7.5%-15%when negotiating contracts,as opposed to the typical 4%-6%,though employers and insurers are resisting these requests with pushback.Employer-sponsored benefit costs in the United

32、 States are expected to rise by an average of 7.6%by the end of 2022,according to Willis Towers Watson.4Private insurance rate negotiations are expected to heat upHealthcare benefit cost growth,2020 2022202020212022 projected4.8%8.1%8.1%6.6%9.7%8.6%Healthcare entities are using real estate to grow r

33、evenue and reduce costsReal estate can account for up to 40%of a healthcare systems balance sheet.As margin relief becomes increasingly paramount,established systems with scale are turning to creative real estate solutions such as portfolio overhauls and optimizations,lease restructures,strategic lo

34、cation analysis and divestments of non-core assets to help save their bottom line.Some of these strategies include:Managing the real estate portfolio withappropriate technology and data(to generatetimely,actionable improvement insights)Aligning locations to mission andbusiness objectivesExpanding,re

35、locating and/or reprogrammingsites to maximize patient access(market share)and patient volumes(revenue)Blending and extending leases to reduce rent orsquare footage in exchange for longer termsBundling leases where there are multiplelocations and significant square footage witha single landlordReexa

36、mining administrativeworkplaces and adjusting to the newwork-from-home paradigm“Reverse monetization”of assets withsignificant hospital occupancyGlobalNorth AmericaSource:Willis Towers Watson8|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.2.Health

37、care providers are increasingly competing in anindustry disrupted by technology,outside investment,shifts in consumer expectations and behavior and theblending of roles within the healthcare space.Patientshave more choices and access to care than ever before.Disruption and innovation9|2022 Healthcar

38、e and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.9677775200300400500600700800900$0.00M$2.00B$4.00B$6.00B$8.00B$10.00B$12.00B$14.00B$16.00B$18.00B20000202021H1 2022Capital InvestedDeal countDigital h

39、ealth venture funding and deal activityCapital investment into startups that create new technologies and digital platforms is one driving force of disruption.Venture capital(VC)flows to the digital healthcare space reached an all-time high in 2021 at$15.4 billion.Almost half of that funding went to

40、the healthcare services sector.VCs,however,may pull back funding through the remainder of 2022 as they take a more cautious approach to the current economic climate.That wont affect health systems exploring ways to enhance their in-house digital platforms.Leaders in the sector ranked digital health

41、and technology investment as their top capital spending and strategic priorities,according to a 2021 Advisory Board survey.2Healthcare venture capital flows erupted in 2021,and big tech continues to make inroads 2.https:/ capital funding in digital healthcare reached an all time high in 2021,at$15.4

42、 billionTop funded sectors in digital health in 2021 33%Healthcare technology systems2%Software13%Healthcare devices and supplies3%Pharmaceuticals and biotechnology2%Consumer durables1%Other46%Healthcareservices$18$16$14$12$10$8$6$4$2$0Venture Capital Funding(in billions)Number of transactionsSource

43、:PitchbookSource:Pitchbook10|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Enterprise technology companies are entering the healthcare space too,making inroads in the pharmaceutical,personal health tracking,virtual clinical trials and health insur

44、ance realms.These new entrants compete with traditional health care providers which are limited by margin pressures and finite capital to allocate on new technology.But there is also an opportunity for traditional providers to partner with new entrants to develop strategies that support greater pati

45、ent access and revenue growth at scale.CompanyHealthcare Investment Areas3AlphabetFitbit and Pixel Watch expanding into health monitoringsuch as pulse irregularitiesCare Studio health records serviceAI divisions DeepMind,focused on health records,and Isomorphic Labs for drug discoveryAmazonAmazon Ca

46、re virtual primary and urgent care visits(shutting down on Dec 31,2022)Announced intention to acquire primary care startupOne Medical in$3.9 billion transactionAmazon Web Services healthcare solutions offeringsPillPack by Amazon PharmacyAlexa voice assistant with HIPPA complianceAppleApple Watch hea

47、rt rate monitoring,ECG app,blood oxygenmonitoring and fall detectionResearch on genetics and DNA testingApple Health Records for iPhoneMicrosoft Microsoft Genomics focused on disease preventionAzure APIs for healthcareAzure Health Bot AINuance DAX ambient clinical intelligence system3.Source:Company

48、 filings11|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.24%12%11%12%9%10%11%10%10%7%7%49%23%21%20%20%19%19%19%17%15%13%0%10%20%30%40%50%60%00500600700Outpatient site of care growth2021 Volume2026 Volume2031 Volume5 Yr Growth10 Yr Growt

49、hPrivate equity funds,projected to more than double assets under management between 2020 and 2025,have also been interested in the sector.According to Bain&Company,5investments in healthcare reached$151 billion last year,two times the levels seen in 2019 and 2020.With 515 transactions,there were 135

50、 additional private equity healthcare deals in 2021 than in the previous year.Investors have focused on rolling up practice groups to expand providers reach,growing medical services companies,or expanding specialty care such as behavioral health.This unprecedented volume has since simmered,falling 5

51、0%from the last quarter of 2021 to the first of 2022,according to KPMG.6Those investing view healthcare as a safe bet for private equity that could lead to operations and overall management advancements.The pessimistic view is that a flood of private equity will inflate healthcare costs to reap high

52、 returns.Private equity invests in care providers,fueling industry consolidation and return maximization 5.https:/ and services are increasingly moving to outpatient settingsHealthcare is shifting away from inpatient facilities to outpatient facilities.As of September 2022,year-over-year outpatient

53、revenues grew 30%since 2020 according to Kaufman Hall,while inpatient revenues only grew 8.5%in the same time.7 Innovation and technological developments are driving the availability of procedures in outpatient settings,supported by payors and reimbursement pressures.Surgical operations are becoming

54、 less invasive and more efficient,with contemporary anesthesia procedures introducing less risk.As consumers seek more convenient and accessible care,outpatient facilities will drive provider demand.This shift will continue to be supported by reimbursement policies,and specialized care options will

55、further drive competition within the industry.Growth in outpatient demand is driving activity and competition among healthcare systemsSource:Advisory BoardOtherLabOffice/ClinicEndoscopyPhysicalTherapyAmbulatorySurgeryIndependentDiagnosticTestingFacilitySleepStudiesOncologyCenterEmergencyDepartmentHo

56、spitalOutpatientDepartment700M600M500M400M300M200M100M012|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Telehealth became a vital facet of the healthcare industry at the beginning of the pandemic when restrictions on in-person interactions were at

57、 their highest.They constituted 52%of all visits in the second quarter of 2020,according to the ChartisGroup.8That was the peak utilization of telehealth.It has since stabilized at 8%,according to The Advisory Board.Insurers granted telehealth coverage more broadly due to the declaration of,and the

58、policies connected to,a Public Health Emergency(PHE),extended to January 11,2023.Unfortunately for beneficiaries,flexibility in access and copays for telehealth will likely revert with the end of the PHE.However,telehealth will have a lasting impact one that may grow as technologies improve and pati

59、ent preferences evolve,especially in areas such as psychiatric care.Telehealth remains popular among patients seeking behavioral health services After an immediate climb,overall telehealth visits have tapered,but remain well above pre-covid levelsWhereas psychiatry telehealth visits remain high as t

60、he pandemic heightened mental health awareness and acceptance,driving more patients to seek care.8.https:/ visits as%of total visitsAll Healthcare ServicesPsychiatry Services31%of requested and directedtelehealth visits lead to an in-person visit+1050 bps+5860 bpsSource:Chartis Group13|2022 Healthca

61、re and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Amid disruption,the onus is on providers to maintain a competitive advantage through key site selection decisions and improved patient experience,or both.As younger generations age and demand greater access to care

62、,providers will need to be even more ready to meet these challenges.The truth is,most health systems lack a base of loyal patients.U.S.healthcare consumers are only 60%loyal to a single provider brand or network,according to Trilliant Health.9Consumer loyalty decreases with age as care becomes more

63、complicated and specialized.Roughly 23%of 65+adults are diagnosed with three or more chronic conditions.These older adults typically have more total care visits and may need to see specialists from multiple health systems,whether they prefer to or not.But in the age of on-demand access to care,techn

64、ology and increased choices,the below factors still have an impact on patient commitment:10More convenient locations:92%of patientssay location convenience is somewhat toextremely important when selecting ahealthcare provider,according to the patientsurvey we ran earlier this yearProtocol expectatio

65、ns:Two-thirds of patientswould take an appointment at a different doctorif their expectations for COVID-19 protocolswere not metBetter customer service:More than half ofpatients would go to a different doctor if thecustomer service was betterCustomer loyalty patterns are changing9.https:/ will be a

66、consistent backdrop as the industry continues to evolve.Health systems can leverage real estate to create a competitive advantage to add and retain patients(i.e.,market share).Some examples include:Location analytics to improve customerconvenience and accessibilityStandardize facilities to promote t

67、he brandand elevate patient experienceAccelerate clinic rollout using data andanalytics to manage project timelinesand costScale multi-site retail construction projectmanagement via technology toolsHealthcare provider loyalty decreases with ageAverage loyalty to healthcare providers by age!#!#$%#$#$

68、(#$#%)#%)#%)#$%&!%&$%!%#(!(#)!)#*!*#$!$#&!&#!#+!+#,Source:Trilliant Health$|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.3.“Systemness”in healthcare means driving efficiency and cost savings across a healthcare system by integrating service l

69、ines,locations and stakeholders under one management team and cohesive vision.If achieved,it makes the interconnected parts of an organization operate as a whole.The goal of systemness is to increase patient access by providing the best care at the lowest cost to the most patients possible.Systemnes

70、strends15|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Last year was one for the record books when it came to mergers and acquisitions(M&A),underscoring the importance of systemness in bringing blended organizations together.There were 13 health

71、system M&A transactions in Q2 2022,according to Kaufman Hall.While thats a lower number of transactions than before the pandemic,total revenue of the transacted parties reached$19.2 billion,nearly two times the revenue in Q2 2021,when 14 health systems transacted.Larger transactions,such as the anno

72、unced acquisition of Atrium Health with revenue of$12.9 billion by Advocate Aurora Health,can provide vast multi-state footprints or supplement a systems care offerings.According to a report from the Assistant Secretary for Planning and Evaluation(ASPE),the principal advisor to the Secretary of Heal

73、th and Human Services(HHS),348 hospitals/systems changed ownership through mergers and acquisitions between 2016 and 2021.Industry leaders expect M&A activity to continue over time,as smaller hospitals that are struggling financially join larger systems or merge to create scale,reduce costs and impr

74、ove the quality of their care through systemness,such as a number ofcommunity hospitals did in the height of the pandemic.Consolidation continues within the industry11.https:/www.aha.org/system/files/media/file/2022/09/rural-hospital-closures-threaten-access-report.pdf12.https:/www.healthaffairs.org

75、/doi/abs/10.1377/hlthaff.2021.00160From 2016 to 2021,9.8 per every 1,000 hospitals were sold a yearChanges of ownership,by hospital per 1,000,by quarter(annualized)2016-2021Due to M&A activity,the ten largest healthcare systems now control a quarter of the inpatient market.The Federal Trade Commissi

76、on(FTC)is increasingly attempting to block further consolidation in the healthcare industry on antitrust grounds.M&A activity can also cause closures of facilities in areas where patients need them.From 2010 to 2021,136 rural hospitals and hospital systems closed,11and mergers are also thought to ha

77、ve decreased available services.12Gaining economies of scale is a driver of M&A activity.Without systemness as a goal,it can also result in increased prices,reduced quality of care,and,in some cases,more stressful working conditions for employees within the system.!#$#%$%&%#%(&#%(&!#%(&)#%(&%#%*&#%*

78、&!#%*&)#%*&%#%+&#%+&!#%+&)#%+&%#%,&#%,&!#%,&)#%,&%#&#&!#&)#&%#%&#%&!#%&)#%$Source:ASPE16|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.!#$!%&$!%#$!&$!#!#$!#%!#&!#!#(!#!)&*(+)$*+)#!*%+),*+)#*,+)#!*+)*+)#(*!+The number of M&A transactions between ho

79、spitals and health systems in the second quarter of 2022 was on trend with recent history,while the revenue of transacted companies shot upNumber of Q2 announced transactions by year,2016-2022Total Q2 transacted revenue(dollars in billions)by year!#!#$!$%!%!#$!#%!#&!#!#!%(#!#)#)#(How healthcare prov

80、iders are using real estate to accelerate and harvest the benefits of being in a system or larger care organizationRationalize ambulatory portfolio(complete post-merger integration)Take advantage of growing scaleand technology to operate properties better and reduce costs(both for hospital M&A and p

81、hysician/outpatient M&A)Expand into retirement marketsSource:Kaufman Hall17|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.AtlantaAustinBostonCharlotteChicagoDallas-Ft.WorthDenverHoustonLas VegasLos AngelesMiamiMinneapolisNashvilleNew YorkOrlandoPh

82、iladelphiaPhoenixPortlandRaleigh-DurhamSan AntonioSan DiegoSan FranciscoSeattle-BellevueTampaWashington,DC0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%0%5%10%15%20%25%30%35%Total population growth,2010 present(%)The healthcare industry is growing outpatient volume in the United States is for

83、ecasted to grow 20.7%over the next ten years.While expansion in healthcare is nationwide,due to migration and retirement patterns,population growth within the Sunbelt markets is outsized compared to the rest of the country,fueling healthcare demand.On average,the Sunbelt markets populations have gro

84、wn by 19%over the past decade,while others have only increased by 9%.By 2030,a projected 55%of the national population will reside within the Sunbelt.Typically,high-growth markets have lower costs to start.But because inflation has been accelerating faster in these markets relative to the United Sta

85、tes as a whole,high-growth markets may also experience more rapid price increases.Health systems will continue to scale into these high-growth markets nonetheless,as access to patients is critical to growth.Patient populations are flooding to retirement marketsSource:JLL Research,Moodys AnalyticsLea

86、ding economic and demographic performance maintains strong trajectory of Sunbelt marketsSize of bubble pertains to net migration from 2010 present;white bubbles indicate negative migrationTotal employment growth,2010 present(%)Sunbelt marketAll other markets18|2022 Healthcare and Medical Office Pers

87、pective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.4.Medical office fundamentals remained steadythrough the pandemic and beyond.Medical office development nationwide has recovered from pandemic-relateddelays in construction starts and has since surpassed historical levels.However,completion

88、s have not reached their pre-pandemic rates and willlikely remain that way due to cost challenges,macroeconomic concerns andsupply chain delays.Medical office real estate trends19|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.22.9M21.7M21.6M22.8M2

89、3.6M23.4M22.1M20.0M19.7M21.0M24.2M26.0M24.6M23.7M22.5M23.8M26.6M24.8M24.2M23.1M19.7M19.0M19.5M20.5M19.7M18.5M22.5M21.7M19.9M21.3M23.5M24.8M25.4M25.8M24.6M23.8M24.7M24.9M24.3M25.7M22.9M20.8M22.1M20.8M21.3M21.8M23.1M27.1M27.4M27.0M010,000,00020,000,00030,000,00040,000,00050,000,0001Q20162Q20163Q20164Q

90、20161Q20172Q20173Q20174Q20171Q20182Q20183Q20184Q20181Q20192Q20193Q20194Q20191Q20202Q20203Q20204Q20201Q20212Q20213Q20214Q20211Q20222Q2022Completed SF(ttm)Started SF(ttm)50403020100Due to the fall in completions amid steady demand for medical offices,absorption has outpaced new supply and occupancy ha

91、s remained consistently above 90%.Medical tenants remain in place more consistently than other commercial tenants due to location of services and higher investment in their premises.Compared to the commercial office sector as well as other preferred sectors such as retail,industrial and multi-family

92、,medical office occupancy is routinely stronger,and the events of the pandemic caused less long-term disruption to the sector.Medical office project starts surpass pre-pandemic levels;however,completions fall to a new lowSource:Revista;Top 100 MarketsMedical office occupancy ticks upwards as demand

93、intensifies in a moderate construction environment91.0%91.3%91.5%91.8%92.0%92.3%92.5%05,000,00010,000,00015,000,00020,000,00025,000,0001Q20192Q20193Q20194Q20191Q20202Q20203Q20204Q20201Q20212Q20213Q20214Q20211Q20222Q2022Occupancy(%)Completed SF(ttm)Absorption SF(yoy)Occupancy Rate(ttm)24.6M25.5MSquar

94、e feet(in millions)Source:Revista25201050Square feet(in millions)20|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Medical office asking rents have grown fairly consistentlyyear-over-year,averaging 2%growth over the past 5+years.By mid-year 2022,th

95、ey reached a national average of$23 NNN per square foot.While most long-term leases include annual escalations that average 2%,todays high-inflationary environment has allowed landlords to achieve closer to 3%annually.Source:Revista;Top 100 MarketsMedical office rent gradually increases for the 11th

96、 quarter in a row0.0%0.5%1.0%1.5%2.0%2.5%$19$20$21$22$23$241Q20172Q20173Q20174Q20171Q20182Q20183Q20184Q20181Q20192Q20193Q20194Q20191Q20202Q20203Q20204Q20201Q20212Q20213Q20214Q20211Q20222Q2022Average NNN RentYoY GrowthNNN rentYoY rent growth21|2022 Healthcare and Medical Office Perspective| 2022 Jone

97、s Lang LaSalle IP,Inc.All rights reserved.62%52%42%40%39%37%36%23%13%13%10%UtilitiesHealth CareIndustrialsConsumer StaplesTechnologyFinancialsIndex AverageConsumer DiscretionaryEnergyCommunicationsMaterialsRelative to other major U.S.corporate sectors,healthcare is among the most creditworthy.Averag

98、e credit ratings suggest healthcare service providers,hospitals and medical operators pose a lower risk of default to landlords than corporate entities in other sectors.Lower tenant credit risk is important during economic downturns.Historically,the healthcare sector has proved resilient during thes

99、e periods,given its inelastic demand profile.The more stable a healthcare company is,the less volatility of demand for space and rents.The healthcare sector tenant base is among the most creditworthy in the U.S.Share of bonds rated A-or higher by sector(U.S.Corporates)Note:Among constituent bonds of

100、 the Bloomberg U.S.Corporate Aggregate and High Yields IndicesSource:JLL Research,JLL Research,Bloomberg Finance L.P.Healthcare systems are more creditworthy than other sectors tenantsSectorMedian Credit RatingUtilitiesAHealth CareA-TechnologyBBB+Consumer StaplesBBB+FinancialsBBBSectorMedian Credit

101、RatingEnergyBBBConsumer DiscretionaryBBB-CommunicationsBBB-MaterialsBBB-22|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.$11.6$11.9$14.8$13.3$13.6$13.9$19.6$5.2$9.2$0$5$10$15$20$25200021H1 2021H1 2022BillionsSingle AssetPortf

102、olioEntityThe fundamentals of population demand for healthcare services,even in times of economic uncertainty,translate into steady real estate demand and investor interest in medical office properties.Considerable tailwinds from an aging population,innovation,the increased availability of procedure

103、s in outpatient settings and the critical nature of healthcare has maintained the industry as one of the most stable asset classes.Medical office sales reached$9.2 billion in the first half of 2022,coming off a year of record investment of nearly$20 billion in 2021.With H1 2022 sales alone represent

104、ing nearly half of the prior years volume,we anticipate 2022 to be another year of high volume,however uncertain market conditions are expected to cause a slowdown through the remainder of the year.Medical office investment trends point to another high-volume yearMedical Office Transaction VolumeSou

105、rce:JLL Research,Real Capital Analytics(transactions larger than$2.5 million)Medical office investment interest persists in 202223|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Strong transaction volume through 2021 translated into competitive pri

106、cing and cap rate compression across the industry.Cap rates stabilized in 2022,averaging 5.9%in Q2,and more recently,have expanded.With the sizeable increase in nominal interest rates,cap rates have climbed.Prevailing demand for healthcare services and the continued shift to outpatient care will ens

107、ure investor appetite for medical offices,even as an economic storm is predicted.Medical office cap rates will expand in response to rising interest ratesMedical office average cap rate;trailing twelve month Source:JLL Research,Revista5.0%5.2%5.4%5.6%5.8%6.0%6.2%6.4%6.6%6.8%7.0%1Q20162Q20163Q20164Q2

108、0161Q20172Q20173Q20174Q20171Q20182Q20183Q20184Q20181Q20192Q20193Q20194Q20191Q20202Q20203Q20204Q20201Q20212Q20213Q20214Q20211Q20222Q2022AllOff campusOn campus24|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.New YorkLos AngelesChicagoHoustonDallasPh

109、iladelphiaAtlantaBostonWashington DCMiamiPhoenixSan FranciscoMinneapolisDetroitSeattle0%1%2%3%4%5%6%7%8%9%10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000MOB development underway as%of inventoryExisting MOB s.f.2Q2022Appendix:Local Market Real Estate Performanc

110、eWhile New York and Los Angeles are the largest existing medical office markets,Miami,Washington,DC,and San Francisco are positioned for growth with the highest concentration of development relative to their current inventorySource:JLL Research,Revista:include on-campus and off-campus propertied 7,5

111、00 s.f.and greaterDevelopment activity across the largest existing medical office marketsAverage occupancy and year-over-year rent growth in the top ten medical office markets is 92%and 2%respectively 0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%84.0%87.0%90.0%93.0%96.0%BostonMiamiNew YorkChicagoLos AngelesPhila

112、delphiaWashington DCAtlantaDallasHoustonYoY Rent GrowthOccupancy Rate(%)Occupancy Rate(%)YOY Rent GrowthSource:Revista25|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Appendix:Local Market Real Estate PerformanceSource:JLL Research,Revista:include

113、 on-campus and off-campus propertied 7,500 s.f.and greaterNote:Bold markets indicate a top 10-market based on total MOB inventoryMOB Market Performance,Q2 2022MarketMSAInventory(s.f.)Availablespace(s.f.)Occupancy Rate(%)Rent psf(NNN)YOY RentGrowthNet AbsorptionYoY 12 mo NetAbsorption changeNew YorkN

114、ew York-Newark-Jersey City,NY-NJ-PA78,555,405 5,204,853 93.4%$26.26 2.1%623,472 0.9%Los AngelesLos Angeles-Long Beach-Anaheim,CA60,393,779 4,523,785 92.5%$36.82 3.0%1,050,260 1.9%ChicagoChicago-Naperville-Elgin,IL-IN-WI43,823,052 3,169,394 92.8%$20.81 1.6%664,870 1.7%HoustonHouston-The Woodlands-Sug

115、ar Land,TX43,583,366 5,116,378 88.3%$23.36 1.9%1,270,225 3.4%DallasDallas-Fort Worth-Arlington,TX38,010,469 3,767,472 90.1%$22.13 1.5%584,868 1.7%PhiladelphiaPhiladelphia-Camden-Wilmington,PA-NJ-DE-MD31,505,892 2,397,698 92.4%$22.20 1.4%216,284 0.7%AtlantaAtlanta-Sandy Springs-Roswell,GA30,257,453 2

116、,810,637 90.7%$21.37 1.5%954,801 3.6%BostonBoston-Cambridge-Newton,MA-NH26,949,930 1,594,574 94.1%$26.40 2.5%263,910 1.1%Washington DCWashington-Arlington-Alexandria,DC-VA-MD-WV24,548,686 2,210,586 91.0%$25.84 1.7%421,411 1.9%MiamiMiami-Fort Lauderdale-West Palm Beach,FL 22,675,355 1,425,711 93.7%$2

117、3.69 3.0%1,010,366 5.0%PhoenixPhoenix-Mesa-Scottsdale,AZ21,422,680 2,444,858 88.6%$20.92 3.3%860,290 4.7%San FranciscoSan Francisco-Oakland-Hayward,CA20,934,348 1,294,707 93.8%$40.68 1.8%644,462 3.4%MinneapolisMinneapolis-St.Paul-Bloomington,MN-WI20,656,603 1,447,749 93.0%$20.55 0.6%408,241 2.2%Detr

118、oitDetroit-Warren-Dearborn,MI19,247,599 1,706,902 91.1%$20.13 1.2%813,768 4.9%SeattleSeattle-Tacoma-Bellevue,WA18,744,033 1,214,488 93.5%$27.86 1.9%135,713 0.8%BaltimoreBaltimore-Columbia-Towson,MD16,440,796 969,752 94.1%$22.69 1.0%463,625 3.1%DenverDenver-Aurora-Lakewood,CO15,245,783 1,288,979 91.5

119、%$23.63 2.9%716,876 5.4%San DiegoSan Diego-Carlsbad,CA15,225,313 919,096 94.0%$30.59 2.4%461,840 3.3%St LouisSt.Louis,MO-IL14,975,095 1,235,130 91.8%$16.84 0.7%104,961 0.8%IndianapolisIndianapolis-Carmel-Anderson,IN13,735,174 1,008,390 92.7%$18.81 1.9%212,273 1.7%TampaTampa-St.Petersburg-Clearwater,

120、FL13,085,897 781,438 94.0%$21.39 1.2%444,720 3.7%San AntonioSan Antonio-New Braunfels,TX13,001,900 1,601,212 87.7%$25.20 1.5%427,412 3.9%26|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Appendix:Local Market Real Estate PerformanceSource:JLL Resea

121、rch,Revista:include on-campus and off-campus propertied 7,500 s.f.and greaterNote:Bold markets indicate a top 10-market based on total MOB inventoryMOB Market Performance,Q2 2022MarketMSAInventory(s.f.)Availablespace(s.f.)Occupancy Rate(%)Rent psf(NNN)YOY RentGrowthNet AbsorptionYoY 12 mo NetAbsorpt

122、ion changeRiversideRiverside-San Bernardino-Ontario,CA12,852,712 778,883 93.9%$24.82 2.9%177,976 1.5%PortlandPortland-Vancouver-Hillsboro,OR-WA12,673,328 525,405 95.9%$24.34 2.2%169,004 1.4%ColumbusColumbus,OH12,394,183 964,254 92.2%$15.79 2.0%486,995 4.5%ClevelandCleveland-Elyria,OH12,373,679 693,4

123、68 94.4%$16.13 0.2%232,515 2.0%OrlandoOrlando-Kissimmee-Sanford,FL11,698,190 869,936 92.6%$22.71 2.1%352,146 3.4%NashvilleNashville-DavidsonMurfreesboroFranklin,TN11,687,583 909,229 92.2%$21.48 1.7%440,015 4.3%CincinnatiCincinnati,OH-KY-IN11,650,586 777,335 93.3%$16.27 1.3%247,421 2.3%CharlotteCharl

124、otte-Concord-Gastonia,NC-SC11,645,709 891,191 92.3%$24.79 2.0%351,531 3.4%Kansas CityKansas City,MO-KS11,529,523 830,084 92.8%$20.58 0.6%133,770 1.3%PittsburghPittsburgh,PA11,443,385 593,842 94.8%$19.25 1.3%74,578 0.7%MilwaukeeMilwaukee-Waukesha-West Allis,WI9,493,483 545,463 94.3%$16.30 0.7%119,888

125、 1.4%JacksonvilleJacksonville,FL9,007,727 495,710 94.5%$22.90 2.2%222,812 2.7%Virginia BeachVirginia Beach-Norfolk-Newport News,VA-NC8,682,555 797,516 90.8%$20.63 1.7%78,493 1.0%SacramentoSacramentoRosevilleArden-Arcade,CA8,490,298 615,125 92.8%$23.63 2.6%142,815 1.8%RichmondRichmond,VA8,279,764 620

126、,469 92.5%$20.12 0.4%749,150 10.8%Oklahoma CityOklahoma City,OK8,184,385 634,961 92.2%$18.34 0.1%20,297 0.3%ProvidenceProvidence-Warwick,RI-MA8,091,070 618,248 92.4%$22.09 0.6%102,354 1.4%San JoseSan Jose-Sunnyvale-Santa Clara,CA7,935,157 376,427 95.3%$46.77 3.9%255,708 3.5%BirminghamBirmingham-Hoov

127、er,AL7,930,720 692,826 91.3%$21.87 2.4%226,730 3.2%Las VegasLas Vegas-Henderson-Paradise,NV7,754,761 731,573 90.6%$22.11 3.8%137,695 2.0%HartfordHartford-West Hartford-East Hartford,CT7,714,266 475,861 93.8%$19.68 0.4%77,884 1.1%AustinAustin-Round Rock,TX7,535,214 759,063 89.9%$25.59 1.0%219,879 3.4

128、%27|2022 Healthcare and Medical Office Perspective| 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Appendix:Local Market Real Estate PerformanceSource:JLL Research,Revista:include on-campus and off-campus propertied 7,500 s.f.and greaterNote:Bold markets indicate a top 10-market based on total M

129、OB inventoryMOB Market Performance,Q2 2022MarketMSAInventory(s.f.)Availablespace(s.f.)Occupancy Rate(%)Rent psf(NNN)YOY RentGrowthNet AbsorptionYoY 12 mo NetAbsorption changeLouisvilleLouisville-Jefferson County,KY-IN7,089,774 432,416 93.9%$14.63 1.9%178,502 2.8%RaleighRaleigh,NC7,075,284 547,189 92

130、.3%$21.53 1.3%249,506 4.0%MemphisMemphis,TN-MS-AR6,876,254 563,641 91.8%$23.14 1.1%(1,600)0.0%BuffaloBuffalo-Cheektowaga-Niagara Falls,NY6,865,666 608,615 91.1%$16.66 1.2%106,543 1.7%Salt Lake CitySalt Lake City,UT6,825,832 262,888 96.1%$17.12 0.6%169,022 2.6%New OrleansNew Orleans-Metairie,LA4,689,

131、761 306,838 93.5%$26.31 6.7%103,141 2.4%About JLL HealthcareJLL(NYSE:JLL)is a leading professional services firm that specializes in real estate and investment management.JLL Healthcare provides a full range of real estate and facilities solutions for hospitals,physicians and other care providers as

132、 well as real estate investors that own and operate medical and seniors housing properties.We help our healthcare clients plan,find,finance,buy,lease,sell,construct,optimize,manage and maintain the most-advantageous facilities anywhere in the US for all property types along the continuum of care,ser

133、ving over 550 million square feet of healthcare property annually.Our professionals have deep technical expertise and market knowledge and are armed with the most innovative,data-driven analytics and business intelligence in the industry.Visit to learn more.About JLL ResearchJLLs research team deliv

134、ers intelligence,analysis and insight through market-leading reports and services that illuminate todays commercial real estate dynamics and identify tomorrows challenges and opportunities.Our more than 400 global research professionals track and analyze economic and property trends and forecast fut

135、ure conditions in over 60 countries,producing unrivalled local and global perspectives.Our research and expertise,fueled by real-time information and innovative thinking around the world,creates a competitive advantage for our clients and drives successful strategies and optimal real estate decision

136、s.2022 Jones Lang LaSalle IP,Inc.All rights reserved.The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of evaluatingthis proposal.All such documentation and information remains the property of Jones Lang LaSalle and shall be kep

137、t confidential.Reproduction of any part of this document is authorized only to the extentnecessary for its evaluation.It is not to be shown to any third party without the prior written authorizationof Jones Lang LaSalle.All information contained herein is from sources deemed reliable;however,norepresentation or warranty is made as to the accuracy thereof.For more information,contact:Maddie HolmesSenior Research Analyst,Industry Insight&Advisory+1 212 479 9845Maddie.HJay Johnson US Practice Leader,Healthcare+1 404 995 6442Jay.JRoger Humphrey Division President,Healthcare+1 908 698 1379Roger.H