Medical real estate is one of the most valuable assets a healthcare practice can have. Building owners profit from monthly revenue from tenants. And tenants directly benefit from facilities in the right locations where their patient bases can thrive. But the key to leasing or owning a profitable healthcare facility is making sure all of the details are right before ever moving in.
The search for a medical property is more than a casual tour through corridors of hospital rooms and nurses’ stations. Site tours require planning, scheduling coordination, and intense market research. Each property walk-through is an intricate process where a prospective buyer or tenant can ask detailed questions, thoroughly review structural and interior buildout options, and determine their must-haves for the new space.
The search for healthcare real estate is a serious undertaking that should involve professionals with the necessary skills and experience. There are three specific reasons why a medical group or health system shouldn’t engage in a property search without the guidance of a medical real estate advisor. These reasons can ultimately affect the overall value of the real estate asset.
1. Medical Real Estate Professionals Know What Details to Look for
Does the space have enough plumbing, cabinets, or patient rooms? Does the facility need a new roof? How old is the HVAC system, and when was the last time someone came to service it? These are just a few of the many questions that medical real estate advisors know to ask property owners. While a medical team might review a facility with their patients and staff in mind, medical real estate advisors look for structural and interior elements. Their experience has taught them to look beyond the surface and into the finite details that could make or break lease negotiations.
2. In Medical Real Estate Spoken Agreements Don’t Always Transfer to the Final Contract
A medical group who is initiating their own building tours may speak with the building representative directly. The prospective tenant will naturally have a few questions and may even begin basic, casual negotiations while touring the site. And in an effort to fill a vacancy, the representative could provide positive answers and probable solutions to any of their potential tenants’ reservations. But if the potential lessee isn’t careful to follow up with spoken agreements, they may never end up in the final lease.
Part of the role of the medical real estate advisor is to communicate the buyer or tenant’s needs. They review the final contracts and ensure specific agreements are included in the lease or purchase agreement terminology. They are a voice for their client, translating their needs into contractually sound final agreements.
3. A “Good Deal” Might Not Be Equivalent to Fair Market Value
Those who aren’t experienced in medical real estate are not always aware of fair market value. Deals made without a CRE broker could seem like a “good deal,” but may not be the best deal for both parties. Fair market value is an especially important element for medical facilities to note in order to be compliant with Stark Law. Medical real estate advisors are familiar with handling the research and communication associated with fair market value so that their client gets the right deal for their facility.
HBRE: A National Healthcare Real Estate Practice
Collectively, the HBRE team has decades of experience in the commercial real estate industry. They have worked diligently in the medical real estate niche market and are well-versed in the distinctive requirements of healthcare facilities. Since HBRE represents both tenants and landlords, they offer perspectives from both sides of the table. Their expertise has saved their clients both time and capital while guiding them through the process of finding the right medical facility for their practice. Before attempting to search for a medical property alone, consider contacting HBRE.
If you are interested in learning more about investing in commercial real estate, or if you have questions about buying, selling, or leasing a commercial property, please contact an HBRE advisor. Our team of experienced CRE professionals have the skills and insight to assist with all property transactions. To reach out to us directly, email [email protected], call 615-564-4133, or follow us on Linkedin.
