When exploring the commercial real estate marketplace there are 4 primary property types to consider for your healthcare practice; office buildings, retail space / shopping centers, medical office buildings and hospital campuses. Each healthcare oriented property possesses distinctly different attributes. However, all healthcare industry real estate is influenced by seven primary factors.
Seven Factors in Finding the Right Medical Space For Your Healthcare Practice
- Cost
- Practice Synergy
- Visibility, Signage and Exposure
- Natural Light
- Property Management
- Building and Local Amenities
- Accessibility
Corporate Office Spaces for the Healthcare Industry
Typically “corporate” Class A office’s focus will be on a combination of efficient and cost-effective workspaces. For such spaces, natural light is a primary driver of worker happiness and productivity. However, for some practices, natural light is not as functional as more secluded exam rooms. Also, corporate office space will tend to be less costly than medical buildings or retail space.
Similarly, different from some healthcare industry properties, corporate office space typically comes with active landlords and the benefit of multiple tenants. By sharing the costs of systems, amenities, and common areas, offices can simultaneously be amenity-rich and value-driven. Furthermore, taxes and maintenance expenses tend to be lower in corporate office spaces than in the rest of the medical and commercial real estate marketplace. Ultimately, the cost of office space is dependent on demand, location, quality, age, and the amenities of the property. Nevertheless, traditional office spaces are often very cost-competitive compared to retail, medical office buildings, or hospital campus spaces.
Retail Space / Shopping Centers
The primary benefit of retail space compared to all other properties is it provides the user the most visibility, exposure and signage per square foot. Thus, when searching for retail space, visibility is very important. For some healthcare companies, the thousands of potential customers that drive by a property every day can be a major source of revenue. For medical practices located within a retail or shopping center, the location’s synergy and diverse mix of potential clients walking or driving by can also be a driver of practice growth. However, retail facing spaces will cost a substantial premium in return for a practice increasing their awareness and brand recognition.
For some healthcare businesses, retail locations can also be a benefit to mobility challenged clientele. Clients that struggle to walk often enjoy the simplicity of parking near or even right in front of a healthcare provider to access the property. Moreover, retail, shopping centers, and some flex spaces are designed for a high traffic flow of cars and pedestrians they usually are easily accessible for less mobile clients.
Based on the quality and location, retail space can be the most expensive healthcare real estate space. Still, retail space can be worth the additional cost to some medical practices.
Medical Office Buildings
Medical office buildings exclusively lease to healthcare industry tenants and therefore provide a unique atmosphere for medical practices designed to create synergy and referrals between building tenants. For medical practices relying on a strong referral base, medical office buildings with a synergistic tenant base are an ideal location.
Additionally, landlords typically provide increased janitorial and utility services, and sometimes healthcare based amenities. Consequently, due to increased amenities and services, medical office buildings can be comparatively expensive, particularly in terms of operating expenses.
Ultimately, for those looking to start a medical practice reliant on referral networks and requiring specific medical amenities, a medical office building can be an ideal location.
Hospital Campus Buildings
The differentiating factor between hospital campuses and other medical buildings is the onsite hospital. The primary reason a practice wants to be located on or near a hospital campus is its affiliation with the hospital or complimentary affiliated practices. Hospital affiliation helps practices dependent on referrals. Additionally, affiliation is essential for practices that need access to hospital-based amenities like surgery or delivery centers. The downside of such facilities is the expense and the normal requirement to maintain a formal affiliation with the sponsoring hospital.
Deciding On The Best Medical Space For Your Healthcare Practice
When deciding on the right fit for your practice, a healthcare-experienced commercial real estate agent can help you evaluate your options. Your agent can provide you with a breakdown of the pros and cons of each property option. The budget will usually be the most significant factor in marking your choice. Still, for many medical businesses the decision can be a complex decision to find the perfect location for your practice.
