More Healthcare is in Your Future

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The residential housing bust may be over, but commercial real estate remains in the doldrums. With the growing efficiency of online retailing, Matt Yglesias thinks this slump may be permanent:

I think people tend to overstate the level of real resource misallocation involved in the 2002-2005 house-building boom. By now America is already underhoused by historical standards. But commercial real estate is another matter. The current downturn will end, and CRE construction will returm to some extent, but I don’t think the business of building shopping centers will ever come back. Retrofitting existing ones as health care facilities, by contrast, should be a booming business.

Yes indeed. See that little shopping center on the right? It’s about half a mile from my house. It used to have a Radio Shack, a Chevy’s restaurant, a dry cleaners, a chi-chi gift store, an Asian noodle restaurant, and a bunch of other miscellaneous shops. But now? The Irvine Company decided several years ago to turn it into a professional services center, with “professional” defined as doctors and dentists of various kinds. There are still some other kinds of shops there, but I assume that as their leases run out, most of them will be converted into medical space.

The good news for CRE, of course, is that buildings are buildings. Construction companies make just as much money building professional offices as they do shopping centers. In fact, maybe someday they’ll start building health malls as big and fabulous as the Mall of America, with plenty of entertainment options to give everyone (and the kids!) something to do while they wait around endlessly for their loved one’s latest round of chemo. Welcome to the future.

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We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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