The Importance of Market Research
As daunting as it sounds, the success or failure of a healthcare practice may not completely depend on the excellence of its physicians but on the thoroughness of their market research. A practice can be top-rated by its patients but earn little to no traction because the location is all wrong. No matter the size of their local market—small town or major city—those looking for new healthcare properties must first learn their market. Paying attention to these five important aspects of market research can help healthcare personnel choose the right site for their new location.
Local Amenities
In a world where patient experience is becoming a significant component of healthcare, local amenities are gaining importance. Patients and healthcare employees alike find value in medical practices surrounded by shops, restaurants, and daily conveniences. For example, patients can pick up lunch, prescriptions, or groceries on the way back from their doctor’s appointment. Maybe the medical facility’s parking is also central to the patient’s workplace, favorite coffee shop, or drugstore.
These types of local amenities might be necessary to grow a practice’s patient base or maintain a healthy employee retention rate. Medical professionals should determine which amenities are most relevant to their patients and keep them in mind when searching for a new location.
Community Infrastructure
When it comes to community infrastructure, healthcare practice owners should consider these questions:
- Can patients easily access the medical property?
- Is public transportation vital for the healthcare practice’s employees and patients? If so, does the community provide it?
- Can the surrounding roads and parking areas handle the anticipated traffic flow of the healthcare practice?
A community’s infrastructure may not be conducive to a large health system or hospital. But it might be able to handle a mid-size hospital or outpatient clinic. A healthcare practice should include community infrastructure in its market research to ensure the facility is opening in the right location within the city.
Zoning Requirements
Many communities regulate the placement of new healthcare facilities through their zoning requirements. While this might be less of an issue for new developments or build-to-suit deals, zoning can pose concerns for adaptive reuse or conversion projects. Traffic, parking issues, and waste disposal are topics of conversation for zoning a healthcare practice. And while a medical practice can request a zoning change, the local government might require a medical practice to make costly adjustments to the property before they allow it.
The Current Market and Financial Analysis
The state of the national commercial real estate market might indicate the right time to buy or sell a healthcare property. But more than the national overview, prospective healthcare property owners need a review of the specific market they are hoping to enter. Local cap rates, occupancy/vacancy rates, and average rent rates can reveal significant points about the market. These rates, along with the medical practice’s financial analysis, can help determine if a community is a good fit for a specific healthcare practice.
Healthcare Real Estate Partners
Many physicians or healthcare personnel don’t have the time to handle thorough market research before purchasing a new medical property. Rather than spending valuable time learning the ins and outs of CRE and the regulations surrounding healthcare properties, they partner with healthcare advisors. Healthcare real estate advisors take the time to complete in-depth market research for their buying clients. And a good advisor will even travel to a site to get a first-hand perspective of the infrastructure, local amenities, and even competing healthcare practices.
HBRE is a full-service healthcare real estate practice with advisors that specifically focus on the needs of medical clients. They have extensive experience with market research, and they even travel to assist their clients in site selection. Medical professionals interested in opening new locations can reach out to HBRE with any questions regarding marketing research. HBRE is fully prepared to handle a thorough market review to help healthcare clients thrive in the right location.
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] or call 615-564-4133.
