Location is an essential consideration for healthcare providers. Apart from the need to locate a property with good proximity to where one wants to do business, there is the need to have a location that not only meets the healthcare provider’s requirements but also supports future growth. An understanding of the healthcare real estate market can make the location decision much easier and allow for sensible property decision-making.
Healthcare providers need to learn more about the property market before taking any steps towards leasing or purchasing a particular property. The research can help reveal information about the rental costs, availability of space, other healthcare providers in the area, demographic composition of patients in the locality, among others.
Define the Practice’s Property Needs
The healthcare providers need to know exactly what type of property they need. This is because each type of facility has its own requirements.
Some of the considerations include:
- The number of examination and treatment rooms required
- The reception/waiting area required
- Requirements for staff members
- Storage space required
- The parking facilities required
- Accessibility for handicapped patients
- Room for expansion in the future
Study the Local Market
Location can influence access and visibility directly. Investigate the population in the vicinity, traffic situation, other health care providers, competition, and transport infrastructure.
Development of an area can ensure access to an increasing number of patients. Areas with established medical districts can ensure excellent referral opportunities but may prove expensive. Comparison of several locations enables providers to realize the pros and cons before committing to one.
Evaluate Leasing and Buying Options
Commercial medical real estate can either be leased or purchased by the healthcare providers. There are distinct features for each approach.
| Consideration | Leasing | Buying |
|---|---|---|
| Initial cost | Usually lower | Usually higher |
| Flexibility | More flexible | Less flexible |
| Property control | Limited | Greater |
| Long-term investment | Limited | Potential asset ownership |
| Maintenance | Often shared or negotiated | Primarily owner’s responsibility |
It all depends on the financial status of the practice, future plans, and duration of stay in the market.
Check Zoning and Building Requirements
Sometimes, there are specific zoning, permits, and construction needs for health care properties. Before choosing any medical property, make sure the property allows performing the intended health care services.
There may be other construction requirements such as the need for accessibility, fire safety standards, parking, ventilation, electrical systems, plumbing, and patient privacy. It may be a perfect property but require substantial modifications to allow carrying out the intended activities.
Consider Patient Accessibility
When dealing with health care properties, it is important to consider patient accessibility of the location.
Patients will need good parking space, public transport access, lifts, ramps, and clear signage. It is not enough to look at a single point in time.
Calculate the Full Cost
Apart from being just an aspect of the deal, the amount to pay monthly or one-off for the rental or purchase of a property could include renovation costs, utility costs, insurance, maintenance, property tax, installation of technology, among others.
Develop an estimate of all the costs to be incurred before comparing the different properties. This is because it will ensure easy identification of those properties that may seem affordable yet may end up being costly due to the renovations and other costs involved.
Plan for Future Growth
There are chances that in the next few years, the size of your medical practice may expand. Therefore, it would be important for the providers to consider if the property is able to fit any additional facilities that may be required.
These facilities include extra staff, equipment, medical services, or treatment rooms, among others. For example, expansion could entail utilizing any extra unused space adjacent to the property.
Work With the Right Professionals
Real estate transactions related to the medical field are complicated. Therefore, you need to consult professionals in the field to get the right property.
The legal and financial advisers can also scrutinize the leases and the purchase agreements, the operating costs, and other considerations. Collaboration among the specialists will help the providers understand the long term impact of their choice of property.
Conclusion
Working through the medical real estate market involves proper planning as opposed to considering only the geographical position and cost of the properties. It is necessary for the providers to learn more and analyze the property needs, the conditions in the local real estate market, the ease of access, the compliance needs, total costs, and the future growth potential of the property.
