Real estate market is picking up for medical office buildings
A number of major real estate companies say office building construction is up across the nation and sales of existing buildings are also on the rise. The good news is that the more desirable tenants – physicians and other medical care providers – top the list of those in need of available real estate.
Reasons for the booming business
Real estate analysts hypothesize about the reasons for the increase in construction. New construction stalled during the recession and the pent-up demand is now coming to the forefront as the economy slowly recovers. Many medical buildings were built many years ago, are aging poorly and need repair or replacement.
A significant factor is also the approval and implementation of the Patient Protection and Affordable Care Act. Over the next few years, it is anticipated that millions of Americans will obtain medical insurance coverage, providing them with affordable access to medical treatment. All of those who previously lacked medical insurance, will be seeking medical care for the first time and will need continued treatment as they age. Facilities will be needed for the influx of patients.
Developers and landlords can benefit
The rise in the number of patients increases the demand for doctors and other health care providers which, in turn, increases the demand for medical care facilities. Physicians are looking for properties for lease and purchase and, when new space comes available, it often does not stay long on the market.
As medical space availability drops, developers and realtors are seeing a slight increase in prices. Retiring medical providers are also getting in on the action as they see the value of their investments rise.
As with any type of real estate transaction, numerous factors must be taken into account when dealing with clinics, hospitals or other health care facilities. Remodeling or constructing a medical facility is more complicated than for a home or for a different type of business. There are many additional considerations such as:
- Designing for safety and accessibility – many users of the building are sick, injured or disabled
- Safety and health issues for visitors and staff as well as patients
- Specialized building codes
- Allergies and sensitivities of patients to building materials
- Natural disaster planning – back-up generators, evacuation and mass injuries
Care must be taken to comply with all building rules and regulations for the state and local municipality as well as the special codes regarding various types of medical treatment structures. For example, a normal exam room will have vastly different requirements than a radiation treatment area.
Seek legal counsel
If you have questions about a real estate transaction, consult an experienced real estate attorney who can help you understand the issues you may need to address with a purchase, sale or lease of a property.