5 Types of Healthcare Properties in CRE

Healthcare is a unique classification within CRE because of the specific requirements that medical spaces have. At first glance, you may think that doctor’s offices, specialty clinics, and other medical facilities don’t have requirements much different from an office building. Consider, though, some of the attributes necessary to operate a doctor’s office: 

• Unique floorplans and layouts for patient rooms and offices

• Additional plumbing  

• Backup generators for cases of power outages

• Accommodations for visitors with disabilities

• Wider spaces to fit specialized medical equipment

In addition to these differences in property requirements, the leases for medical commercial real estate differ from general office buildings. This makes sense, of course, as medical CRE will require a higher construction cost because of the attributes we listed above. But medical offices tend to be occupied by tenants for much longer and will have longer multi-year lease terms. 

Connect with CRE Companies in Healthcare

With Biscred, you can access more than 547,000 companies and 4.5 million professionals in commercial real estate, including more than 61,000 companies and 1 million professionals that specialize in healthcare CRE. With our various data points, your sales and marketing teams can grow your network to target the ideal types of companies you’d like to partner with. 

For example, within the healthcare asset class, our database includes 11,300 construction companies and 10,600 general contractors.  

Further analysis shows the largest concentration of CRE-related firms are headquartered in California, Florida and Texas, but our data sets include companies in all 50 states. You can filter searches by geographic areas and cities.  

When we look at individuals’ professional levels within their organizations, 79,700 are directors or senior management, while 191,700 are managers (and most likely to be decision makers or decision influencers).

If you’d like more insights into healthcare CRE, schedule a demo to see how Biscred can help grow your business.

Guide to Healthcare and Medical Properties in Commercial Real Estate

To understand the priorities and needs of a property owner, manager, or investor in medical CRE, let’s dive deeper into the most common types of medical properties, their users, and specialties. Although medical CRE is a niche field, there may be insights gained that lead to a business opportunity for you and your firm.

Hospital Complexes

A hospital complex is a larger commercial healthcare property that handles serious illnesses, injuries, and emergency medical conditions all within one building or complex. A hospital, or hospital complex, is usually the largest of the healthcare properties and requires the most unique adjustments because of the specialized care necessary.

A hospital needs multiple entrances and facilities for each type of care. Additionally, hospitals require redundancies in power systems. Owners of a hospital property have to ensure that their facility (and the lease) complies with laws and regulations around healthcare properties. Hospitals are also temperature-controlled facilities and require complex HVAC systems and other specialized utilities. 

An investor interested in medical commercial real estate may not be aware of the specific requirements to lease out a hospital complex to a medical tenant. If your firm has experience planning a remodel or construction of larger medical projects, you may be in a position to partner with builders or investors on developing a hospital complex property. 

• The largest hospital complex in the country, based on number of beds, is AdventHealth Orlando, with 2,247 beds. (Definitive Healthcare)

• The largest hospital by total facility area is Creedmoor Psychiatric Center in New York, with more than 9.3 million square feet. (Definitive Healthcare)

• The largest hospital by total area is Texas Medical Center, which is home to 21 hospitals including the renowned M.D. Anderson Cancer Center. (Visit Houston Texas)

Medical Office Building

Medical offices — also called MOB, for medical office building — can range from administrative-only operations (billing centers, for example) to mixed-use with clinical care. On the administrative side, they may handle billing, referrals, human relations, and other business operations. On the clinical side, they house doctor’s offices, out-patient surgical centers, labs, diagnostics and some specialty practices.

Medical office buildings are usually located adjacent to, or nearby, hospital complexes. This opens unique opportunities for businesses dealing with medical offices. 

A medical office owner may also own the hospital complex. They’re interested in sharing services across the offices, hospital and all the owned properties. This includes maintenance, management, security, and anything else that both properties would need. 

Specialty Clinics

Specialty clinics are a medical CRE property type that encompass a wide range of services that, while not emergency, do require patients to go in to receive treatment. Specialty clinics are smaller — usually around the size of a single suite within an office building. There are a lot of different specialty clinics, including, but not limited to: 

• Psychiatrists

• Orthopedic medicine

• Physical therapy centers

• Urgent care

• Dermatology

• Dental

Although these specialty clinics do have their own individual requirements, there are generally far fewer exceptions in where they can be located. In fact, it’s becoming increasingly common for specialty clinics to rent out spaces in retail centers not only for visibility but also for convenience. That’s not to say that specialty clinics are retail — that’s saved for our next category.

Specialty clinics will range in requirements, especially related to the equipment that the facility needs. A specialty clinic, like an urgent care clinic, may also need to be open and operating 24 hours.

Retail Medical Services (‘Medtail’)

Medical retail — sometimes called “medtail” — can refer to medical spaces within retail spaces (think of a pharmacy inside a big box store or a medical supply store in a strip mall) as well as stand-alone or retail storefronts. They are typically around the same size as retail spaces. These retailers include pharmacies, medical supply companies, and even medspas. But, as we mentioned before, it’s becoming increasingly common for specialty care to rent spaces in retail centers. Therefore, retail medical is a tricky category to pin down. 

To make it simpler, we’ll look at it from the perspective of a retail center owner. Medical offices and services usually have longer-term leases, which can be attractive to a property owner or investor. But specialty care can be potentially higher risk due to market uncertainty. A retail space may also have to be modified to handle a certain type of specialty care. Retail medical services can also have higher maintenance fees due to the construction and upkeep required to operate a specialty care facility. 

As a third party, your business can potentially be the bridge between a care provider and a retail property owner. Whether it's maintenance services or property development, making a medical tenant attractive to retail center owners will be mutually beneficial to all parties.

Extended Care

Extended care facilities are a type of medical space that includes nursing, palliative, and hospice care. Extended care facilities are larger, as they have to comfortably house a lot of patients. These patients live in the facility full time and receive care from on-site employees and medical professionals. The type and level of care will change based on the facility, but these types of medical care centers tend to be far larger to comfortably house patients.

Also worth noting is that these types of extended care facilities tend to be near hospital complexes. Hospice and palliative care, in particular, are frequently near emergency services or at least easily accessed from a main road or highway. Of course, this is less so in rural and remote areas. Extended care facilities may need to be constructed from the ground up, rather than converted or renovated, because of their very specific care needs. 

Extended care facilities do require unique services like hazardous material and trash removal, as well as landscaping, and janitorial services similar to apartment and condominium complexes. They also require a 24-hour staff of nurses, nursing assistants and medical personnel. 

Sources

Definitive Healthcare, What are the largest U.S. hospitals by bed count?, 2024-08-19

Definitive Healthcare, Top 10 hospitals and IDNs by total facility area, 2024-03-25

Visit Houston Texas, Texas Medical Center, undated

PHOTOs 

ID 40153236 | Hospital |Valentin M Armianu | Dreamstime.com

ID 16879882 | Urgent care | Konstantin Lobastov | Dreamstime.com

ID 10959769 | MOB | James Martin | Dreamstime.com

ID 347848415 | Drug Store | Rzyotova | Dreamstime.com

ID 2056029 | Long term care | Qiwoman01 | Dreamstime.com