Investors have always relied on real estate to diversify their portfolios and earn substantial returns. However, there are some niche asset classes that often get overlooked, such as medical office buildings (MOB), since they are typically perceived as complicated and more costly when compared to other property types.
Over the last few years, we have witnessed the resilience of the healthcare sector as patients have continued to seek medical care regardless of economic issues or global health considerations. Therefore, more investors have shown an interest in medical office buildings by adding them to their portfolios. If you are a new investor, this guide will help you better understand medical office buildings and the benefits of investing in them.
What are Medical Office Buildings (MOB)?
A Medical Office Building, or MOB, is a commercial property that is specifically developed for health care providers. Typically, these buildings feature patient waiting rooms, exam rooms, and specialized building systems – all designed to ensure an efficient and effective delivery of care.
Depending on their location, MOBs can either be on-campus or off-campus buildings. On-campus buildings can be found on or near a hospital campus, while off-campus buildings are located further away from hospitals, typically in suburban and residential areas.
What are the key features of MOBs?
There are several key features that make MOBs an attractive option for medical professionals. First and foremost, MOBs are designed with patient care in mind. This means that they typically have ample parking and easy accessibility for patients, employees, and visitors. Additionally, MOBs often have state-of-the-art amenities like on-site pharmacies and laboratory services.
MOBs can be single story or multi-story, and are often located near hospitals or other health care facilities. They typically range in size from 5,000 to 100,000 square feet, and can be owned by hospitals, private investors, or developers. Many MOBs are leased back to hospitals or health systems under long-term leases, which provide stability and predictable cash flow for investors.
Benefits Of Investing in Medical Office Buildings
MOBs tend to be very stable investments; even during economic downturns, everyone needs access to healthcare. Additionally, MOBs often appreciate in value over time due to the growing demand for healthcare services. MOBs can also generate healthy cash flow from rental income.
Investing in a medical office building can be a great way to diversify your portfolio and generate stable cash flow through rental income. However, it’s important to do your homework before making an investment; you’ll want to consider the location of the MOB, the mix of tenants and services offered, and the overall demand for medical office space in the market you’re considering. With careful planning and due diligence, medical office buildings can be a great investment.
If you have any questions about investing in medical office buildings, don’t hesitate to contact our team today.
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.If you have any questions about leasing, buying, or selling a commercial property in Nashville or beyond, connect with our team today.
