In certain South Florida markets medical office properties are beginning to enter the market. There are some excellent opportunities to acquire medical offices at bargain rates and prices. Then again, there are some medical office spaces being offered that could prove to be disastrous for potential users.
In addition to leasing, selling and developing medical properties, we have been representing healthcare professions in acquiring medical office space for 30 years. We have endured full cycles of fluctuations in the industry, including interest rates and supply and demand.
When working with healthcare professionals, we incorporate our years of local expertise in the South Florida medical real estate market to provide them with the most complete knowledge available to assist them in choosing and finalizing the best alternative for their needs.
There are several quality medical office spaces being offered for sale in certain strong submarkets that represent some of the best deals in many years. The key is to differentiate the strong properties from the weak ones.
Some important factors to consider when acquiring a medical office are:
Location:
Location ranks as the key to the acquisition decision. We are aware of healthcare professionals who have left the core area of their practice to acquire an office at a favorable price. However, what they did not take into account was the number of existing patients they would lose as a result of such a move. No matter how good a deal a physician can strike in a medical building, if it results in losing existing patients, it is probably not a wise move. The exception to this however, could be an additional location for a satellite office.
The Development Team:
The development team should have a strong reputation, track record and expertise in developing and owning medical buildings. Investigate their experience, especially for new projects. An experienced development team is aware of the nuances that will insure the project will retain its value over the long term. There are many factors involved in the planning of a long term successful medical project. Many projects are poorly planned and turn out to be bad investments for healthcare professionals who are the buyers in these projects. There has been a recent influx of developers with no prior experience in developing these types of properties. These buildings are typically the ones that have relatively low occupancy rates and are in financial trouble.
Quality and Design of the Building:
The quality and design is a major factor in the success of a medical practice. Look for architecturally distinctive design that has a general patient appeal. This applies to both exterior and interior common areas.
Parking:
The parking should be adequate to meet the needs of the building. Medical buildings require more parking than a regular office building. What is the parking ratio of the building? Parking ratios should be based on the gross square footage of the building, not the usable square footage.
Quality of the Management:
If the building is properly maintained the future value of the investment in the building can be protected. It is important that the curb appeal and common areas are well maintained. A management company experienced in medical buildings should be retained.
Accessibility:
Buildings with high exposure locations close to public transportation are preferable. Retail locations are a trend for medical buildings because they attract a tremendous number of visits per person. There should be easy ingress and egress for patients.
Flexibility of the Space:
In the case of ownership, healthcare professionals should take more space than they need initially, and lease it out until needed.
Because of the present situation with the economy and possible changes to healthcare industry, many healthcare providers are in a holding pattern. However, there are some excellent properties at bargain prices. There are lenders still making 90% to 100% loans on medical offices. Depending on the submarket area, some rental buildings are now offering rental concessions and/or large tenant improvement allowances.
If you are medical provider now in the market for office space, your timing may be excellent.
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