JLL Capital Markets completed the sale of 450 4th Ave., a nearly 37,000-square-foot medical outpatient building in Chula Vista. The firm’s Medical Properties Group represented the seller, Turner Impact Capital, and procured the buyer, Cypress West Partners in a joint venture with TPG Angelo Gordon. Terms of the sale were not disclosed.

The JLL Capital Markets Investment Sales and Advisory team representing the seller was led by director Matt DiCesare and senior managing director Evan Kovac.

450 4th Ave. is located on the campus of the 173-bed Scripps Mercy Hospital Chula Vista. The four-story property serves the broader southern San Diego area and is located between the 5 and 805 Freeways. Renovated in 2015, it is currently leased to 12 tenants, including anchor tenant Scripps Health.

When baby boomers came of age, they brought multiple changes to the workforce, entertainment and society. According to a recent video from Marcus & Millichap, this age cohort, born between 1946 and 1964, exerts as much influence as it ages and retires.

Marcus & Millichap’s John Chang divided the video presentation “How Aging Baby Boomers Could Impact CRE” into two parts.

The Workforce and Brain Drain

Chang, Marcus & Millichap’s senior vice president, national director, research and advisory services, said that 11,000 baby boomers will retire each day, this year. Here’s what this means for employers:

• This cohort is carrying what Chang classified as “unique information” and “unique skills” out the door

• This is forcing employers to shift and adapt as they face the “brain drain” resulting from retiring boomers

Chang said he recently spoke with a group of developers who were discussing the loss of key construction personnel who plan to retire in the next couple of years.

“The leaders of these construction firms have become very reliant on a core group of very experienced tradespeople,” Chang noted. “In general, the U.S. doesn’t have a deep bench of workers with these very important skills.”

The numbers bear this out. The Bureau of Labor Statistics indexed boomers’ role in various career types, noting their impact in areas like financial services, manufacturing, education, and health services. This is in addition to CRE-specific services, like construction, plumbing and electrical work.

Baby Boomers and CRE Considerations

Meanwhile, on the real estate side, Chang said that baby boomers are more reliant on healthcare services, with people over the age of 75 visiting their doctors 6.4 times per year, on average.

“Think about this for a minute,” Chang said. Over the next five years, an estimated 15.5 million people will turn 76 in the U.S., and the total population aged between 65 and 75 will grow by 6 million. That’s a lot more doctor visits.”

This, in turn, means more demand for medical office space over the next five years. But even as the baby boom generation drives demand for this space, Chang noted that the “pace of development has been relatively slow in recent years.”

Demand for senior living options is also anticipated to increase as baby boomers age. Chang pointed out that the average occupancy rate of assisted living facilities in the United States is 84%, a figure “that has increased for nine quarters straight.” However, Chang added, the pace of assisted living development has declined due to construction cost increases and significant labor shortages.