So how has the down market affected the medical real estate business you may wonder… or may not. But if you do wonder it is doing Grrrreat!!
Healthcare is ramping up and will continue to ramp up–it’s almost like grocery stores. A lot of it’s not discretionary. Meanwhile, the boomers are coming to the doctor every week. But the big thing is that the investors figured it out. Medical is very complicated, but now investors don’t have any other choice–retail’s in the tank, office is very slow, multi-family has its ups and downs–and they’re looking for a long-term safe investment. And a medical building with a long-term lease by a physician group or hospital system creates investment-grade real-estate.
Occupied medical office buildings are being sold in the neighborhood of $200 per square foot, while a typical office building sells for $100 to $125 per square foot.
It’s the quality of the lease that creates the value. The quality depends on the building’s location, the credit-worthiness of the tenant and other factors. For example, if you have a hospital that’s tenuous as far as their ability to continue, that wouldn’t be attractive to an investor. But if the hospital is doing well and pays a good lease rate, it improves the value.
Overall Leasing is a good idea.. Hospitals can depreciate a building over 39 years if they own it, but if they sell it and lease it back they can depreciate it right away. Also, if you take the cash and put it into new markets, the return on investment is much, much higher.
If you are an IT or finance guy working at a medical company, this little bit of 411 might be helpful.. OR if you were ever thinking about a carreer change into the medical real estate business here is your excuse to quit your job and move into a new field..? 
