Healthcare: Medical office – The new core asset class
q. Why is medical office an attractive asset class tolenders today?
a. Medical office proved itself to be a more stable assetclass than other property types in the recent downturn.Medical office occupancy stayed at much higherlevels since hospitals, doctors and practice groupshave a high tendency to stay in place. Healthcare isn’trecession proof, but it demonstrated its recessionresistance. Investors looking for stable, predictableincome like the characteristics of healthcare realestate. Plus, a high percentage of occupancy is tiedto highly rated, investment-grade hospitals.
q. What makes medical office occupancy so stable
a. Think about how long the doctors you and your familygo to have been in the same place! Factors that drivecontinuity in healthcare occupancy are the significantinvestment in infrastructure for medical office andclinical space, and the synergies gained from locatingin dedicated medical office buildings and in medicalclusters close to hospitals. Healthcare is local anddemand for services is pretty continuous, no matterwhat community you’re in.