Medical office space: The emergence and effects of master leases

Medical office spaceIf you’ve been looking for medical office space, then you must probably have noticed that the sector is changing with the emergence of master leases. In a master lease a large organization or institution will take the lease on several floors of office space and then sublease smaller spaces to healthcare providers. Once they have been signed, these contracts give well-funded companies the opportunity to offer individual lease contracts to physicians and other healthcare practitioners. There are many advantages associated with master leases, which is why they are currently trending and expected to significantly impact the medical sector in the years to come. This article discusses the emergence and effects of master leases.

New, larger medical office space is available

One of the main benefits of master leases is that they spur the construction of modern buildings that meet the new standards of the healthcare sector. Indeed, healthcare professionals used to rent office space in conventional buildings, which they then tried to convert into medical office space. This often made it hard for certain doctors to successfully integrate a geographical area of interest due to the limited availability of high-quality medical office space. The advent of master leases is to bring changes that will affect the activity of doctors in various ways. For instance, critics are already pointing out that the cost of renting new and modern medical office space could be prohibitive given the recent surge in medical office lease rates across the nation.

The role of the Affordable Care Act

As you might know, the Affordable Care Act (ACA) has brought massive changes in the U.S. healthcare system. While some have complained about its negative implications such as the technological standards that doctors are now required to meet when caring for patients, others have praised the fact that the new legislation means more business for physicians. To accommodate the new influx of patients, doctors will need to be in larger and better-equipped offices.

The emergence of master leases is putting pressure on rents since medical office space is demanded by creditworthy doctors. This is a win-win situation for both corporate landlords and tenants, since the latter will be eligible for all the benefits associated with the ACA full compliance.

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