Medical Office tips
9 tips for buying medical office building
Even as a global pandemic moved most medical services online, making the future of medical facilities uncertain, investing in medical office real estate is still considered a stable investment that is more resilient to shifts in the market. While not completely “recession-proof,” investing in a medical office building (MOBs) can add depth and strength to a real estate portfolio. Here are nine tips for buying medical office real estate.
Medical building investment vs. traditional real estate
Even as patients switched to telehealth for safety during the pandemic, 95% of medical facilities continued to pay their rent (as opposed to 85% of other businesses), anticipating a return to future in-person care.
Although traditional real estate remains a good investment, medical building investments consider the aging population in the U.S. There is no shortage of need for healthcare and its associated services, and the increase in insured people means more people of all ages are seeking medical care services.
unlike traditional real estate, medical office buildings, including urgent care centers and micro-hospitals, remain an investment largely immune to even subtle shifts in the market.
Potential roadblocks
Another major difference from investing in traditional real estate, medical building investments may face two critical hurdles: permits and regulations.
Permits are standard for buildings, but medical office building permits can be more complicated. These also need to consider:
● Potential hazardous waste situations
● Traffic impacts
In addition, medical facilities that operate after hours may face resistance from community members who do not want flashing ambulance lights and sirens, or excessive traffic after dark. This can make getting the proper zoning permits more challenging.
Once permits are in place, regulations kick in. Medical office buildings that operate in conjunction with another healthcare service facility or with the state are rigorously regulated and required to meet specific criteria for operation. If you change anything about the facility or services it offers, getting regulatory approval can take up to a year or more. Keep that in mind when deciding what type of facility to invest in.
