HH has also targeted the Medical office sector, focusing on specialized properties that are differentiated from typical suburban office. The sector has proven to be resilient, stable and highly in-demand.

There are several key reasons why demand for Medical office will continue to increase:

• Ageing U.S. population requiring additional medical care

• Changes in outpatient delivery models due to the passage of the Affordable Care Act

• Consolidation of hospital systems and movement away from partnership-owned physician practices

• Trend of Hospitals monetizing real estate

Additionally, Medical offices are uniquely attractive due to the tenants’ need to stay in the location for longer than a typical office tenant due to:

• High build-out costs for specialty equipment and other requirements

• Familiarity of location for their patient base and proximity to other service providers

HH continues to focus on Medical office opportunities that feed off of an existing Medical ecosystem (i.e. proximity to a hospital or other service providers).