Understanding the Growing Need for Medical Office Space
With 2019 approaching, many investors are setting intentions to expand their investment portfolios in the New Year. If this sounds like you, the medical office space sector is certainly one that you will want to keep within your sights. According to Transwestern, the demand for medical office space is projected to far surpass the supply in 2019, making now the right time to dive headfirst into this sector of commercial real estate. Let’s take a look at some of the facts that you should know before you take the next step.
How Demand is Changing
According to Elizabeth Norton, director of research at Transwestern, there was “approximately 110 million square feet of available medical office space in the U.S. as of the second quarter of 2018.” The demand for available space has since grown to approximately 150.5 million and is expected to continue increasing at an outstanding rate. It could potentially reach 225.8 million by the onset of 2019 and through its first quarter. As you can see, the growth here is phenomenal in a relatively short amount of time.
As our population continues to age, the need for additional medical office space continues to grow. Currently, the population of people over the age of 65 is growing at a rate 14% faster than that of people below the age of 64. 14.9% of the entire population is estimated to be over 65, with this percentage expected to increase to 17% by the year 2020 and a whopping 22.1% in the year 2050, according to CNS News. These facts alone prove that this increasing demand for medical office space shows no signs of slowing down.
Increased Need for Workers
With the increased demand for medical office space comes an increased demand for skilled healthcare professionals, and the people are listening. More and more students are choosing to pursue degrees in the medical field. In fact, over 150,000 practitioners are estimated to be added to the medical field over the course of the next two years. This flood of new practitioners will only continue to drive the demand for adequate office space. For investors, that means further safeguards against empty property and more wiggle room in the lease negotiation process as the market becomes more competitive.
Healthcare Spending on the Rise
Numbers don’t lie, and one way to get a clearer picture of the current state of the medical office space sector is to look at them. Healthcare spending continues to be on the rise, growing at an average of 5.2% per year!
Less Traditional Spaces
As demand for medical office space grows and supply dwindles, practitioners are getting creative with their practices. There is a rise in the presence of telemedicine and digital healthcare, however, unlike the impact of e-commerce on retail, these advances in medical accessibility do not seem to be impacting the need for traditional medical office space. Some practitioners are also opting to invest in the process of re-purposing general office space to avoid the rising costs and high demand of medical office space that is already wired for success.
As demand for medical office space rises, doctors are thinking smarter. Larger practices offering a multitude of specialty doctors on-site are emerging everywhere, allowing practitioners to keep their individual costs down while, at the same time, creating more convenience for their patients. Mobile medical space is also popping up, as well as a plethora of urgent care centers designed to expedite patient processing.
Lots of Development
More and more medical office space is being built each and every day across America. Cities like Austin, Dallas, Denver, Fort Lauderdale, Nashville, Portland, Raleigh-Durham, Salt Lake City, and Seattle have seen the greatest increase over the course of 2018, but other markets are catching up. This is what makes it a great time, across the board, to lease or invest in medical office space!
Looking to Lease or Buy Medical Office Space in Tampa Bay or the Surrounding Areas?
No matter what your goals are for the coming year, if they involve medical office space or any type of commercial real estate, John Milsaps is the next call on your to-do list. Using his vast knowledge in the Tampa Bay commercial market (and particularly in the office and medical office sectors), John works diligently to secure the best deals on the best properties for all of his clients. His reputation as both an expert in his field and a fair advocate in the transaction process make him an obvious choice to work with. Take a look through his database of available properties and contact him today to get your search underway.