Medical Office Buildings Remain Viable

With the country’s graying population, our need for medical care increases each year. That need translates to demand for additional medical staff, and with that, demand for more healthcare facilities ranging from physician’s offices to laboratories, specialty treatment centers, ambulatory surgical facilities and acute care hospitals.

New facilities are built in areas of population growth to address this need as well as to replace existing, obsolete facilities. Technology demands will also require new infrastructure within different sectors of the medical industry. Within the broader category of healthcare real estate, single tenant medical office buildings (MOBs) fall into discrete uses, including special purpose facilities such as dialysis centers, cancer treatment centers, ambulatory surgery centers, eye surgery centers and offices that house a single physician practice or a small group of complementary practices.

In order to determine the viability of single tenant MOBs as real estate investments, we must understand both sides of the landlord/tenant relationship. The first question to address is, why do some medical providers choose to lease instead of own?