Our firm has offered medical commercial real estate services for many years now, representing doctors and medical buildings throughout the western suburbs. The most recent trend we have seen in this field is the flight from hospital campuses. In the past it has been popular for a variety of doctor groups to be located on the hospital campus, often times attached to the hospital. Although this may provide a great location and tenant referral source, it is often times more costly and probably does not offer a purchase option.
Over the past five years more office medical parks have been developed, where doctors choose to lease or purchase space off the hospital campus. This trend has gained popularity as doctor groups expand into new markets, create satellite offices, and start to note the high rental rates associated with on-campus office buildings. Historically, these on-campus building charge a third to fifty percent more than typical office buildings as the main attraction of the hospital is a draw for tenants. Furthermore, many hospitals do not offer purchase options on campus as the building is a high-grossing asset for the hospital and selling space would take away this income stream.
Additionally, our firm has seen higher “pass-thru” charges with on-campus buildings. Many times these charges are higher in general as most on-campus buildings are multi-story, leaving more common areas that need to be pro-rated out to tenants. For example, a single story office building will most often times have a very small shared space that each tenant will pay a portion of. In a multi-story office building, elevator shafts, lobbies, additional hallways, and stairways alone suggest more shared space that needs to be paid for.
The recent flight from on-campus locations has provided doctor groups with alternative, more cost-concise options that allow them to allocate finances to new equipment, staff salaries, and overall net profit-meanwhile offering the same amenities. For more information on off-campus medical options, please contact O’Donnell Commercial today at 630.444.0444.