Medical office buildings (MOB) can be lucrative investments for real estate investors. As with any investment, MOBs offer unique opportunities and considerations. Here’s what real estate investors need to know about owning and managing medical office buildings.
Understanding the healthcare industry
MOBs are unique in the real estate market since they are anchored by healthcare tenants, making it essential for investors to understand the dynamics of the healthcare industry. Additionally, healthcare providers’ needs and requirements can change quickly, and investors must stay abreast of these changes to ensure their MOB remains attractive to tenants.
Leasing and tenant management
MOBs are typically leased to healthcare providers who may require specialized lease agreements (due to nuances such as co-tenancy clauses). Therefore, investors need to have a thorough understanding of healthcare leases and tenant requirements to ensure they are able to meet their needs and keep high occupancy rates. Investors must also consider the size of the building and the number of tenants—larger buildings with more tenants will require more hands-on management.
Maintenance and upgrades
MOBs require regular maintenance and upgrades to keep them attractive to tenants and compliant with health and safety regulations. When considering which medical office building to purchase, you should consider the age of the building and how much work it will need – both before it’s leased and on an ongoing basis; generally, the older the building, the more updates that are required.
Tips for managing your MOB
Under certain circumstances, some owners simultaneously manage their MOB. So, for those looking to manage your own MOB, here are some tips:
- Take a customer-centric approach
- Be proactive in your communication
- Follow up on complaints
- Be attentive to your tenants’ needs
In conclusion, owning and managing a medical office building can be a lucrative investment, but it requires a thorough understanding of the healthcare industry, leasing practices, and property management. Real estate investors must be prepared to invest time and resources to ensure their MOB remains attractive to tenants and provides strong financial return. By following these tips and seeking the advice of experienced healthcare real estate professionals, investors can increase their chances of success in the MOB market.
About HBRE
Headquartered in Nashville, Tennessee, HBRE is a full-service commercial real estate firm specializing in healthcare real estate. With over 50 years of combined industry experience serving 28 states across the U.S., we deliver exclusive healthcare solutions so you can provide the best patient care.
