Is Medical Office Space the Hot New Investment Trend?

Since medical practices are usually tied to professional practitioners, the field is always awash with change. Businesses must be dissolved or reassigned to new owners regularly, and there is a constant churn of demand for office space. For that reason, it’s often a good idea for investors looking at options for commercial income properties to consider medical office space as a niche.

In recent years, the demand has picked up even more because of the increase in outpatient surgical clinics and other specialized operations that have only been possible with the emergence of new technologies over the last two decades.

Finding Financing for Medical Buildings

Healthcare financing options have traditionally offered options that assume the buyer of medical real estate is a practitioner, but that has changed in recent years. Now it is easier than ever to finance medical office space as an investment because you have options in the traditional real estate financing market as well as the financing companies focused on healthcare-related lending.

Space and Resources in One Place

What makes a medical office different from regular office space is the layout. You need to provide a lot of private rooms for conversations with patients and for staff to converse about issues surrounding anything from tests and treatment to staff discipline. There also needs to be a reception area designed to control the flow of people into professional spaces like an examination or testing rooms.

For that reason, most standard office spaces are not suitable for the medical market. Investors with office properties that want to reach this market need to consider renovation or investment in new construction to meet the potential tenant’s needs for specialized space use. In addition to the layout of the space, this means providing the infrastructure needed to power and operate specialized medical devices, some of which are quite large. X-ray machines in dentist’s offices are one example of a device that needs that special accommodation.

Finding Medical Office Space for Sale

Existing medical office space might be easier to renovate and turn into new construction or a site that has to be repurposed, but it is not something one finds in the MLS every day. It helps to network with other investors and to pay attention to the healthcare community’s local communications. You’re more likely to find out if buildings are coming onto the market, especially buildings without an attached practice. The biggest challenge in finding stock that is purpose-ready is the tendency of current owners to sell it as part of an active business’s assets.