Real estate is one of the most valuable investments we can make—not just because of the potential for incurring capital from tenants over time, but also in the equity and resale value. As demand increases, so does the potential for a higher pay-off when it comes time to sell. The recent growth in medical real estate demand provides a tempting proposition for medical real estate owners to sell. But before a property owner can make that decision, they need to understand what factors create the right market in which to sell their property.
Market Research
Legislation, economic factors, socioeconomic factors, local supply and demand, and several other key points are involved in thorough market research. These factors, combined with the nuances of medical real estate, cause many healthcare professionals to hire medical real estate advisors (more information below). Location and property values are some of the specifics medical advisors study when handling market research.
Location
Markets fluctuate per specific region. Medical real estate owners should be aware of general property values and amenities in their immediate areas. There are a few questions to consider when reviewing the location surrounding a medical property:
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- Are surrounding commercial properties increasing in value?
- Is the medical property close to other healthcare facilities that are valued at a high price point?
- Is the medical property near local amenities, shopping areas, and restaurants?
- Are there governmental measures in place to ensure continued population growth and market stability?
The answers to these questions give the property owner an overview of their market area. These answers may also give them advantages when marketing their property to potential buyers. If a medical property owner is uncertain of how to access the answers to these location factors, they should reach out to a medical real estate advisor.
Property Value
Even if the market research yields favorable results, healthcare property owners need to learn the value of their specific property before they decide to sell. The structural and interior elements of the property can change over time. These factors, compared with the other facilities in the area, help determine the value of a property. For example:
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- How long has it been since the flooring was updated?
- Does the interior need to be repainted?
- Does the exterior need new landscaping or new walkways?
- Is there enough space for both employees and patients to park?
To estimate what a specific medical property could be worth, a property owner can research other properties that have recently sold in their area. While each medical property will have a different value, medical properties of a similar size may be a good reference point.
When considering the value of a property, the owner should also keep in mind that existing tenant leases can help determine the value of the sale. If current tenants still have several years remaining in their lease terms, the value of the property could increase. For more information on improving the value of a facility, visit: 5 Ways to Increase the Value of Medical Building.
Hiring a Medical Real Estate Advisor
Recognizing the right market in which to sell a medical property takes plenty of research and skill. Medical real estate owners don’t typically have the time or resources to handle market research. They spend most of their time managing the daily needs of the medical tenants or employees on site. Because of this, many medical professionals choose to hire medical real estate advisors to handle everything from market research to the final transaction details.
Medical real estate advisors are familiar with the niche healthcare sector. Each sector of commercial real estate has its variances, but medical real estate carries a few unique facets. Some of the specifics include legislation and structural details that directly apply to the healthcare industry. For professional, knowledgeable insights regarding healthcare real estate, reach out to HBRE.us.
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.
