Medical Office Investing

[Kevin Dean]

I was curious to see if anyone has experience investing in Medical Offices. If so what has your experience been? Additionally, how do you see Medical Offices as an asset class performing going forward?

Thanks!

[Joel Owens]

Depends on what you are talking about with medical offices. There is the traditional office building with some medical in it. Those you can own the whole thing or a specific unit in there (like a condo). The tenant pays you rent but leases are generally gross or modified gross.

More medical growth now is really going into more small retail centers at the street level. Those operate more like NNN leases. I have clients that buy those. Medical has a low ratio of doctors available to patients so there is tons of demand. All my doctor clients make tons of money whether surgeons, dentists, etc.

I like retail/medical crossover more. Doctors have heavy tenant improvements with machines and wiring etc. so tend to not move around as much and stay longer in a space if  a good location. I like owning the whole property and not so much one space like a retail condo as you do not usually have control of the whole building which can impact your investment.