Understanding Healthcare Commercial Real Estate

Healthcare Commercial Real Estate Blog Image: An empty, clean hospital hallway.

Healthcare commercial real estate is a niche market with complex regulations. However, purchasing medical realty remains an excellent option for real estate investors. “The medical office investment thesis is strong and sound,” according to the Washington Business Journal, “long-term leases, stable occupancy and income, strong tenant credit quality and tenant retention to keep investor eyes keen.”

Understanding Healthcare Commercial Real Estate

Knowing the healthcare commercial real estate industry is important if you are considering investing. Here are a few key factors to consider.

Healthcare Real Estate Options Vary

There are four primary types of commercial properties that fit the unique needs of medical professionals.

  • Traditional office buildings provide a professional setting for tenants.
  • Retail space provides increased visibility for tenants. Another benefit is parking. Retail space tends to have visibility, opportunity for signage, and ample parking. Because of these benefits, retail space tends to be more expensive.
  • Medical Office Buildings (MOBs) are dedicated exclusively to healthcare tenants, which can help create strong referral partners between tenants.
  • Similar to MOBs, hospital campuses offer many of the same benefits. However, the biggest difference is affiliation with the hospital itself, which can help create a strong referral base for tenants.

Financing Options

Healthcare commercial real estate loan policies tend to differ from residential real estate loans because lenders understand that medical tenants tend to be more stable and sign longer leases. So, while residential loans are heavily dependent on an investor’s income and financial assets, a commercial healthcare loan takes other factors into consideration as well, including borrowing experience, the property’s purpose, location, capacity, occupancy, and revenue potential.

Has COVID-19 Hurt the Medical Industry?

While no industry has been immune to the effects of COVID-19 regulations, “one thing is for certain, healthcare real estate isn’t going anywhere,” according to the Washington Business Journal. Regardless of whether you’re interested in medical office space, retail medical clinics, pharmacy, urgent care facilities, or any other segment of the medical industry, healthcare commercial real estate investment will continue to provide reliable returns.

Advanced Technology Helps, Not Hinders the Medical Industry

We know what you’re thinking. With the rise in telehealth options for patients, won’t healthcare commercial real estate suffer? And the answer is a resounding N-O. According to the Washington Business Journal, “advances in telehealth will reinforce rather than replace on-site care.” There is still a need for well-located, long term healthcare real estate and, as a result, the medical real estate market in Maryland remains strong.  

A Commercial Real Estate Broker Can Help

Hiring a commercial real estate broker specializing in the healthcare industry can help save you both time and money.

  • These brokers know what their investment clients need. But more than that, they know the properties, buyers and sellers, and have access to building sales databases and cutting-edge tools to locate properties that will work for you.
  • Not only do these brokers understand medical real estate, but they also have access to up-to-date market data and tools that track industry trends, vacancy rates, and comparable properties. All of this specialized knowledge combined with ongoing relationships with sellers, put your broker in a great position to negotiate on your behalf and, ultimately, save you money.

With this much at stake, enlisting the services of an experienced medical real estate broker should be a no-brainer. 

A Healthcare Commercial Real Estate Broker in Maryland

United Development Realty is a Commercial Real Estate Broker in Maryland specializing in the representation of medical and dental professionals. We know the medical industry inside and out and our client-first approach ensures that your unique needs are always met. We take the time to get to know you and your goals.Then, once we fully understand your vision and objectives, we can assist you through a tailored package of services.

Please call our office (locations in Bethesda 240-221-1976 and Fells Point 410-522-1632) to get in touch with a licensed commercial real estate broker today. 

About Charles Peacock

Over the past 30 years, Charles has been involved in Maryland real estate sales & leasing, property management, real estate investment, and the construction industry. He is a licensed commercial real estate broker, specializing in the representation of both tenants and landlords, as well as medical and dental professionals. Charles has also represented several medical building owners.