Healthcare: Leasing market for medical offices hits downturn

If you rent, experts advise negotiating lower rates or seeking various perks. If you own and lease space to others, customer service is increasingly important.

Would you like a golf club membership with your medical office lease? How about a few months of free rent? Fresh paint for the walls? How about just lower rent?

“Everybody is renegotiating their leases,” said Tom Dalcolma, a partner in Street Sotheby’s Medical Realty Advisors in Columbus, Ohio. “It’s clearly a tenants’ market.”

The real estate slump, combined with tighter credit, means that fewer medical office buildings are being built. But after a previous construction boom, there is still more supply than demand.

So rents are creeping downward, and vacancy rates are going up. These are the conclusions of the Medical Office Research Report published by the real estate investment company Marcus & Millichap. The report looked at the second half of 2009.

For physicians who rent space, this means it’s a good time to look for a better deal. But those who lease to others might need to take extra steps to keep tenants happy.

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By Victoria Stagg Elliott for AMEDnews


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