By: Amanda Bhikhari
Florida has experienced a huge influx of new residents in the past few years. Throughout the state you’ll find snowbirds moving for a better climate, professionals moving for new opportunities, lifestyle change and better tax incentives as the market grows, and families leaving big city life to establish roots in more suburban areas in Florida. In addition, in areas like Central Florida, big investors have established offices and purchased high dollar medical real property due to strong demographics, readily available open space, and the continued appeal of healthcare professionals looking to grow and open new offices. On a national scale, according to data released by Revista and Healthcare Real Estate Insights (HREI), outpatient medical real estate development projects totaling nearly $7.7 billion in construction value and 19.4 million square feet were completed in 2016.
What does this mean for health care professionals in Florida? It means increased patient volume. It means prime medical real estate markets exist for practices looking to thrive. It means providers need to prepare in advance for the demographic shift and expansion, and diagnostic centers and labs will need additional locations.
Over the last five years, the medical real estate community has also seen a decrease in the amount of vacant units available in medical office spaces. That vacancy rate has fallen to less than 10 percent since 2011. This makes it increasingly difficult to find medical office space availability in prime, populated locations with reasonable rental rates for rent, especially for those independent providers with no connection to the hospital or governmental circuit.
Understanding this medical real estate landscape demands market knowledge specifically as it pertains to healthcare providers. Leasing medical office space requires many creative long-term options for renewal and expansion as a hedge against diminishing supply and rising costs. Knowing and understanding the market, the options and strategically crafting medical office lease agreements are key to helping the medical professional’s bottom line.