Entries Tagged as 'Medical Office Space'
Here is a partial reprint of an article that appeared on the Orlando Medical News website. Good information for doctors or other medical professionals when looking for medical office space.
The number one factor affecting doctors' decisions when deciding on medical office space is affordability. Recently, a large surgical practice in Orlando signed a long term lease for 30,000 square feet in a new mixed use development project in South Orlando at $17 per-square-foot. This new leased space will also include an outpatient surgery center on the premises. Before signing this lease, this same practice was offered the same amount of medical space closer to a major Orlando hospital for $25 per-square-foot. Why pay $25 per-square-foot when you can go down the street and pay $17?
Doctors are looking for access to major road arteries and highways so their patients can find easily them. If a doctor's office is tucked away somewhere off of Lake Destiny in the middle of Maitland Center their patient may have a more difficult time finding them and have to go through a maze of side streets to find their office. After exiting the highway, doctors expect their patients to make less than two turns to find their offices. After all, as a patient they may not be feeling all that good in the first place. Why make their plight any more difficult if they can't find their doctor?
Mixed Use Development/Modern Architecture
Often, physicians are now looking for mixed use development featuring more modern architecture. They want buildings that are appealing and inviting. Unless it is a very small practice the old one story stucco flat roof office building is becoming a thing of the past. Two new medical office building projects are Legacy Pointe at Metro West and The Fountains at Tivoli Place that are being developed in Windermere. These are two examples of prime upscale designs with the more modern office park environments that many physicians want.
Parking Ratio and Parking
Most professional office buildings have a parking ratio of two to three parking spaces per thousand square feet. With patients coming and going throughout the day, doctors need to have at least four to five parking spaces per thousand square feet to avoid overcrowding. Since parking can be tight in the downtown corridor, doctors often shy away from downtown medical space. Reserved parking is also a nice plus for key employees and physicians. Covered handicapped pick-up and drop-off areas are a real asset, especially if there are associated outpatient treatment facilities.
Shell Space vs. Used Space
Although shell space may cost more in the beginning, it will end up saving the doctor a lot of money in the long run. With new shell office space you can do space planning/ design work to fit your own needs and patient flow. This way you won't waste square feet. Used office space with existing layouts often can't be adapted without expensive demolitions and remodeling. While this can be accomplished, there still remains the potential for poorly laid out space that doesn't fit the needs required.
Proximity to Other Physicians
In a medical office building, doctors are often looking for proximity to other physicians who could inter-refer to each other. For example, a family medicine physician will frequently refer patients to other medical specialties such as cardiology or orthopedics. With the right synergy, all of the doctors are inter-referring and enhancing their practices.
After interviewing several doctors, the new buzz word is "Ancillary Services." Traditionally, hospitals were the main benefactor of many of these services. Ancillary services include MRI's, sleep labs, physical therapists, outpatient surgery centers, and imaging centers. Doctors are more recently looking for extra medical office space where they can install ancillary services and other diagnostic treatment areas.
In the past, doctors needed to be close to the hospital to round on large numbers of inpatients and perform mostly inpatient surgeries. Now procedures are more frequently performed on an outpatient basis, and doctors can relocate their offices farther away from the hospital at usually lower lease rates. Many practices now have incorporated outpatient surgery facilities located at or nearby their office location.
Willingness of the landlord to restrict leasing to other physicians of similar specialty in the same building is often requested. While many physicians view this as an important concession, it probably is not that important in the long run. After all, there is really nothing a physician group can do if a competitor wants to relocate across the street. This is probably more important in rural or less populated areas where a new hospital is being established.
Building monument or signage to distinguish your medical group or practice is an important feature. Local zoning laws often restrict the size and location of business signage in any given area, but often the developer can offer "top of building" signs for major anchor tenants.
Medical Office Space
Everyone may be talking about the weak office market but there are areas in which the demand for office space remains strong and is even growing. The services of health care providers are required, regardless of the economy or real estate values and many realty professionals are making the most if this opportunity.
With the coming implementation of the Affordable Health Care Act, signed by President Obama on March 23, 2010, it is nearly certain that the high demand for medical and health care-related office space will continue. As the American public gains access to affordable medical, dental, and other forms of health care, more and more facilities and practitioners will be required to care for those who, in the past, have not sought or have severely limited use of health care services.
In some areas the overall office vacancy rate is as high as 25%, yet, the medical office space made up over 26% of the total leasing of office space in those same areas. According to David Scherer, manager of one-half million square feet of medical office space in Nevada, “Medical office space is recession resistant due to the fact that people need medical procedures through good and bad economic times. There wasn't as much speculative building with medical office space during the real estate boom, since it typically needs to be located next to a hospital, which makes it naturally supply constrained.”
Because medical offices are seeking new, more convenient locations to better provide services to their patients, the demand for medical office space is no longer constrained by the need to locate near a hospital. As health care becomes more available to American, medical offices are spreading into suburban areas, shopping centers, and other non-traditional medical office locations, driving the demand for medical office leasing even higher.
The average rents for medical office space has also dropped significantly during the past year, allowing health care providers to expand their office space as well as add additional locations to their practices. In addition, some medical practitioners are concerned about the implications of the health care act, has resulted in medical professionals choosing to lease office space rather than purchase existing facilities or building new structures.
With the health care legislation providing drive for the future of many medical practices, healthcare professionals are taking advantage of the tenant’s market. Incentives are often available with office space leases, such as tenant improvements, waived maintenance fees, or even free rent for a period of time, it only makes sense that businesses such as health care providers will benefit from the slow office market.
Due to slow reimbursements from government-provided health care, such as Medicare and Medicaid, as well as many private insurance providers, combined with the desire to reduce overhead costs, some practitioners have consolidated their practices in order to gain more negotiating power, resulting in the need for larger facilities and additional medical office space. Locating the right medical offices for these larger practices, combined with other factors, has worked together to keep the medical office space market robust even during slow times for the overall office space market.