My office is currently working with a client that is looking to acquire a medical office building. The property is very close to Sarasota Memorial Hospital which is undergoing a major expansion. The asset is distressed and the property needs some minor repair. As we walked our client through this asset, the logic for investing in well located medical office really is a matter of common sense.
The part that makes 'sense' is that as the Baby Boomers continue to retire their needs for medical care will be shifted from where they currently live to where they are retiring. And for every one person that retires, there are multiple disciplines of medical care that they will need. Thus, an increase in the demand for that space (not to mention jobs) can be reasonably expected simply by people retiring to an area. I would expect to see this theme across the State of Florida.
Our client will hopefully acquire the property based on Today's market conditions and enjoy the 'ups' as the market gets back to more normal conditions. More importantly, I believe the downside to be measured based on the asset class, the location, and the Baby Boomers!
Today, I received an article from Mark Alexander, a National Director of Medical Office Sale/Leaseback who was quoted in his local paper about movement in Medical Office (see below). This certainly is an asset class worth watching...
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