Michigan & Indiana Healthcare Market Report
Michigan Market Overview
With more than 10 million residents, Michigan is the 10th most populous state in the U.S. The state’s hospitals have been nationally recognized for high-quality care. Henry Ford Health, Ascension, and Beaumont Health System are among the top healthcare systems in the state. An aging population combined with increasingly health-conscious consumers has led to a growing demand for medical office buildings. Health systems and private practices are focusing on convenience and accessibility by expanding into free-standing buildings away from hospital campuses.
By The Numbers | Past 12 Months | Source: CoStar Group
- Sale Price/SF: $149.72
- Average Sale Price: $2.48M
- Sales Volume: $334.81M
- Average Cap Rate: 7.89%
- Average SF: 17.6K
Michigan Market Performance
Michigan experienced population growth in nine out of the 12 years between 2010 and 2022. The most substantial annual increase occurred at 0.8% from 2019 to 2020. The state is home to more than two million residents aged 60+ and jumped from the 29th to the 14th oldest state in 2021. This has contributed to the growing need for medical offices, as there is an increase in healthcare consumers. In the last two years, there have been 167 healthcare transactions, with the highest sales price at $64.5 million. With over 29.3 million square feet of medical office buildings sold during this period, investors are increasingly drawn to the security and resistance to economic downturns found in healthcare real estate.
Indiana Market Overview
Indiana is the 17th most populous state in the U.S., with approximately 7 million residents. The growing need for healthcare has fueled an increase in medical offices throughout the state and highlighted shortcomings in the state’s healthcare regulatory system. After recognizing faults within regulations and consumer protection, Indiana officials recently enacted new bills protecting primary care physicians from non-competes as well as protecting consumers from excessive “facility fees.” IU Health, Ascension, Franciscan Health, Parkview Health, and Community Health Network are among Indiana’s top healthcare providers, all of which are nonprofit.
By The Numbers | Past 12 Months | Source: CoStar Group
- Sale Price/SF: $221.57
- Average Sale Price: $3.36M
- Sales Volume: $285.7M
- Average Cap Rate: 7.86%
- Average SF: 20.8K
Indiana Market Performance
Indiana has seen a constant average population growth of 0.4% from 2010 to 2022, creating an influx of patients seeking physicians for medical needs. It has been estimated that one in five residents will be 65+ years old by 2030, according to the Central Indiana Community Foundation (CICF). This aging population is expected to increase demand for easy access to outpatient care. In the last two years, there have been 102 healthcare transactions, with the highest sales price at $34.6 million. These numbers are projected to continuously grow as the population size and age trends upward.
