Medical Office Space – A Changing Landscape
Submitted by P. Barry
Success in business is contingent on adapting to a changing environment. The Affordable Healthcare Act is one such instance of this, where Healthcare providers and their affiliates are presented an opportunity to capitalize on an expanding industry. To do so, however, requires understanding the implications and nuances of the legislation.
CoStar, a leading real estate source specializing in commercial listings and analysis, has reported a noticeable decline in medical office space vacancy over the course of the past year. This is undoubtedly a response to an impending increase in demand as health care becomes affordable to a broader range of people. For related reasons, there has also been a sudden influx of requests for proposals for new medical office real estate projects. Commonly referred to as an RFP, this approach allows organizations to assess the viability of developing medical space.
In order to meet the increasing demand, real estate advisors are introducing healthcare providers to leasing opportunities with developers who are either re-purposing retail space or building from the ground up. Vacant retail buildings offer vast amounts of unstructured space in prime locales at a lower cost, whereas building gives complete customization. These two routes are optimal given the legislation’s competitive preference to all-in-one facilities – open space allows for easy departmental subdivision.
If the ever-evolving and expanding healthcare industry was not enough of a catalyst to evaluate the benefits of investing in medical space, new government subsidies have made this type of real estate even more attractive. Expect this trend to continue to grow with the changing medical real estate landscape.