top of page
  • Writer's pictureMAREJ

Exploring the Healthcare Real Estate Landscape: New Jersey vs. Florida

By Kim Kretowicz, Colliers

The stark differences between New Jersey and Florida’s business environment, political environment and climate are blurred with the not so obvious synergies created by the intense competition within the healthcare industry. The rapid consolidation and competition within the health-care sector has led to increased demand for well-located, modern medical facilities with strong demographics.

New Jersey and Florida offer strong albeit unique demographics.

Florida previous imbalance of “the graying” has shifted with strong migration and appeal of low state taxes with New Jersey maintaining its position of the most densely populated state in the country. Local, regional and national Health systems, Physician groups, Developers/Investors are looking to raise brand awareness by strengthening their reach in these communities with specialized medical facilities and properties. Many health-care systems are looking to expand outside of traditional markets to compete with other health-care providers and grow their patient base, so they want maximum visibility and modern facilities to brand in both New Jersey and Florida.

Neither New Jersey no Florida have been shielded by the historic disruptions of 2023 but uniquely the states demonstrate the strengths of healthcare commercial real estate.

Shared Economic Environment

Historic Disruptions

• The bid-ask spread is limiting transaction volume, as sellers’ pricing expectations are adjusting to the higher interest-rate environment.

• Rising interest rates, large domestic banks minimizing or halting lending activity and higher capital reserves imposed by the Fed on large banks and debt service coverage ratios have hindered lending and slowed the MOB investment landscape.

• Inflationary Impacts on Healthcare Real Estate Development. While the rate of inflation has since dropped inflation remains a critical factor for the healthcare real estate development industry. As prices rise for raw materials, labor, and other essential inputs, the cost of constructing new healthcare facilities escalates. These cost increases have the potential to slow or even halt the progress of development projects.

Healthcare Real Estate Resilience

• Rental rate growth for MOBs have been between 2-4% this strong rent growth for medical office can temper the rise of cap rates.

• Medical Office Building (MOB) fundamentals remain strong with resilient occupancy and steady rent and NOI growth in both New Jersey and Florida and a shift to outpatient care opens opportunities for investment in MOBs and Ambulatory Surgery Centers (ASCs).

• Medtail is a Rising Solution for Consumers Providers and Healthcare Developers

Consumers can conveniently access healthcare near their homes, restaurants, and stores. At the same time, landlords benefit from long-term healthcare tenants who provide income and a steady customer traffic flow through the surrounding area. Healthcare providers can benefit from lower construction costs and enjoy better exposure and patient volume. While much of the world has returned to normal, consumers still expect convenience.

• Interest in healthcare real estate has grown, and transaction volumes reached an all-time high in 2022 despite the present dip in 2023 family offices and REITS show maintain interest with continued souring interest by private equity.

Unique Demographics

New Jersey

New Jersey ranks as the most densely populated state in the U.S. and the second highest median household income across the U.S. as well as one of the largest state economies. Pharmaceuticals, biotechnology, finance, tourism, and transportation dominate as New Jersey’s largest industries; altogether, the state’s GDP totals well over $500 billion.

New Jersey’s researchers and healthcare providers historically and continue to pioneer the future of medicine. A strong alignment of New Jersey’s hospitals, medical schools, academic institutions, and the private sector has helped make the State a “hotbed” for innovation. As a result, companies located here are on the forefront of bringing breakthrough treatments and products to market. In 2021, 39% of FDA novel drug approvals came from companies with a footprint in the State.

New Jersey is home to many leading healthcare systems. Among the State’s 113 hospitals and 72 acute care hospitals, 13 are nationally ranked according to U.S. News & World Report’s 2021-2022 Best Hospitals rankings. Topping the list is Hackensack University Medical Center and Morristown Medical Center.

Demand for Medical Office Space in NJ looking for large blocks of medical space is leading to the rise in adaptive reuse with outdated office buildings as well as vacant shopping mall department stores fueled by competing leading health systems from New York, Connecticut and Pennsylvania.

Sample New Jersey Healthcare Developments

• Valley Hospital / Valley Health’s acute-care hospital /$800M 875,000 s/f Paramus NJ

• The Cancer Center at Cooperman Barnabas Medical Center /RWJBarnabas Health and Rutgers Cancer Institute $225/137,000 s/f Livingston NJ

• VillageMD paid $9 billion to acquire New Jersey-based Summit Health, the parent of urgent care clinic chain CityMD

• Hackensack Meridian Health’s 80,000 s/f ambulatory care center at ON3 Clifton NJ

• RWJBarnabas Health and the Rutgers Cancer Institute of New Jersey, New Brunswick NJ $750M/ 520,000 s/f cancer hospital

• Hackensack Meridian Health’s surgical and intensive care tower $714M/530,000 s/f Hackensack University Medical Center Hackensack NJ

• The Summit Health Multispecialty Hub in Clifton, New Jersey — an office-to-healthcare transformation 100,000 s/f Clifton, NJ

• Valley Health System 60,000 s/f lease/ North Market, a redevelopment of Mercedes-Benz headquarters mixed-use development Montvale, NJ

• Hackensack Meridian 80,000 s/f facility Paramus, NJ

• RWJ redeveloped an 80,000-square-foot mall pad site Eatontown NJ

• Cooper Health Moorestown Mall 165,000 s/f conversion Moorestown


Florida’s population grew almost 2% in 2022, making it the fastest-growing state in the nation for the first time since 1957, according to U.S. Census data, as families and businesses are drawn by lower taxes and growing numbers of jobs.

Florida was the top state for migration from within the U.S. in 2022, contributing to its population growth. The influx of businesses can be attributed to Florida’s pro-business tax laws, thriving economic climate, innovative development projects, as well a diverse and educated labor force. Florida’s population growth is breaking records as employees follow businesses to the sunshine state. The lack of personal income tax in Florida is part of what is attracting some of the nation’s wealthiest to the area. Companies like Citadel and Related Cos. have moved into the Florida market, signaling that the once-transient area is attracting long-term investors.

In addition to the influx of residents and businesses, two years ago the state Legislature repealed the “certificate of need” requirement, which restricted new hospital openings and expansions. In Central Florida, the growth of Freestanding Emergency Departments (FSED) by the area’s “big three” systems (HCA, Advent Health and Orlando Health) have been ongoing for years. However, FSEDs did not require a CON and were, therefore, a great way for a system to plant its flag in the market while going through the lengthy CON process. The repeal, mixed with Florida’s business and residential influx, resulted in a flurry of medical related development. Floridians continues to see more free-standing emergency facilities, smaller community-based hospitals and micro-hospitals.

More than 1,440 establishments operate within the Florida biotech, pharmaceutical and medical development scene, with a foundation of more than 46,000 healthcare establishments. The state offers these companies and R&D centers a broad range of industry expertise. Florida is home to the nation’s second-largest medical device manufacturing industry, second-largest pharmaceuticals manufacturing industry and the fifth-largest biotech R&D industry. Major players in the field that in Florida include Johnson & Johnson, Bausch + Lomb, Bristol-Myers Squibb, Medtronic, Arthrex and the Mayo Clinic. Hospital for Special Surgery (HSS 60,000 s/f center across from Good Samaritan Medical Center in West Palm Beach. HSS cited serving some 3,000 Florida residents in their New York facility prior to opening a local hospital and Walmart cites Florida as one of its biggest markets with three new clinics in Jacksonville, Fla and 22 coming to the state by fall 2023.

Sample Florida Healthcare Developments

• Moffitt Cancer Center 498,000/s/f $400M Tampa

• Universal Health Services (NYSE: UHS) / Alan B. Miller Medical Center / hospital campus 365,000 s/f 150 room hospital and medical office space

• The Advent Health Winter Haven Hospital Campus 42-acre -20,000 s/f Emergency Room/ 192-bed Hospital/ MOB, Winter Haven Florida

• UF Health Jacksonville / Rethink Healthcare Real Estate / Rendina Healthcare Real Estate - Three Emergency Department & Urgent Care (ED/UC) Facilities Jacksonville, Florida

• Jackson Health System emergency department expansion $300M/130,000 s/f Miami, Florida

• AdventHealth Palm Coast Parkway hospital 158,000 s/f $167M Palm Coast, Florida

• Wiregrass Ranch/ Orlando Health and multispecialty physician group Florida Medical Clinic (FMC) are planning a new 300-bed hospital /5,000-acre master-planned community Wesley Chapel, Florida.

• The Jupiter Medical Center Surgical Institute 90,000 s/f / $100M Jupiter Medical Center campus/Jupiter FL

• Jupiter Medical Center 92-bed Hospital/ $110M Jupiter Medical Center

• Memorial Cancer Institute in Pembroke Pines -Memorial Cancer Institute and Florida Atlantic University/ 121,000 s/f / $125M Pembroke Pines, FL

Kim Kretowicz is senior VP of USA Capitals Market Group/Healthcare Services Healthcare Investment Services - USA Capital Markets.



bottom of page