Healthcare real estate has been in high demand in recent years. The aging baby boomer generation and legislation changes have both played a part in the necessary increase of medical property. But the COVID-19 pandemic has also shed light on this sector and the need for different types of healthcare spaces.
The unique structural components and contractual details of healthcare real estate separate it from the four common commercial real estate (CRE) sectors—office, retail, multi-family, and industrial. While there is some overlap with the office and retail CRE sectors, medical real estate is commonly recognized as a niche sector of CRE. So, to help provide more details regarding this unique sector, we have put together a brief description of the most common healthcare properties.
Common Types of Healthcare Real Estate
Hospital Campuses
A hospital campus is likely the first property type that comes to mind when someone says the phrase “healthcare real estate.” Hospital campuses create solid referral bases for medical practices. Facilities on a hospital campus allow patients to easily visit the specialists in those facilities after they have received hospital care. Likewise, patients visiting individual medical buildings are in proximity to the hospital in the event they need emergency surgery or extended care.
Office Buildings
This is where medical real estate intersects with the traditional office CRE sector. Some health systems lease or own commercial office properties. Their corporate teams work in these settings rather than within the walls of a clinic or hospital property. In some cases, these types of office spaces are more affordable, and tenants all share janitorial or maintenance services.
Medical Offices
Medical office properties include anything from small doctors’ offices to healthcare systems. The facilities, usually about 40,000 square feet, make up 10% of office properties in the U.S. These spaces are usually dedicated to medical tenants, which can create opportunities for referral sources and opportunities for patients to see different physicians under the same roof.
Retail Medical Facilities
As we’ve mentioned in a previous article, Drugstores, Clinics, and CRE, healthcare real estate has shifted more and more from the hospital setting over the years. More retail giants have opened healthcare services under their brand names. Walmart, Walgreens, and CVS are a few of the notable companies to offer new or unique health offerings. But these types of medical facilities are not the only representations of retail healthcare properties.
Medical groups sometimes purchase existing retail spaces. Shopping plazas or large malls offer foot traffic and more visibility to new patients. In 2019, one source suggested that ambulatory services were the most likely medical tenant to choose retail spaces. Other uses for retail space turned healthcare facility include physician offices, dentist offices, and outpatient care centers.
Experts in Commercial, Medical Real Estate
HBRE’s team of advisors have years of experience in medical real estate. Unlike some large commercial real estate practices, HBRE has a team of commercial advisors that focus solely on the healthcare sector. They understand the unique requirements of this sector, including Stark Law and the Anti-Kickback Statute. And they know the industry standards and best practices that specifically relate to the medical sector.
While their market research spans the nation, HBRE also studies details associated with each submarket. Whether a health system is looking for assistance in managing an extensive portfolio of medical leases or simply looking to expand into a new market, HBRE is fully equipped to handle negotiations. Learn more about HBRE’s team of experienced commercial, medical advisors on 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.
