Types of Commercial Real Estate Properties to Generate Passive Income for Physicians

When it comes to the commercial real estate properties that serve as the foundation for healthcare businesses to generate passive income for physicians or doctors, things can get quite complex. There are many different types of properties and tenancy agreements that you should know about. If you’re a healthcare professional, let’s take a look at the common types of properties offered for sale or rent, so that you’ll be well equipped to make smart choices later on.
How do you choose which commercial real estate property types are best for your healthcare practice?

There are a variety of commercial real estate properties that are suitable for healthcare businesses to generate passive income for physicians. Many of these come down to one of four widely used types: medical office buildings, hospital campuses, modern office buildings, and retail spaces or shopping centers.

Learn about the different types of commercial real estate buildings that are available for your business and get passive income ideas for doctors.

1. Medical office buildings

Medical office buildings are designed in a more clinical way than regular office buildings, which means they have smaller rooms (with specialized equipment for healthcare providers), and often no offices with windows. Medical office building property is a popular choice to generate passive income for doctors looking for commercial real estate properties. Medical office buildings are dedicated solely to healthcare tenants, and they frequently provide an environment that fosters strong referral relationships and synergies among tenants in the healthcare industry. Janitorial and utility services are also more readily available in medical office buildings. As a result, they can be more expensive than standard office buildings, but the price depends on a variety of criteria, including the property’s location, quality, and age.

2. Hospital campuses

Hospital campuses usually contain similar-looking buildings that are typically in close proximity to one another, and have been specifically designed with healthcare providers in mind (i.e. clinic buildings, parking areas). Medical office buildings and hospital campuses are fairly similar. The added benefit of hospital access is the distinguishing feature. The goal of hospital affiliation is to build a solid referral base for practice. Many doctors purchase medical real estate deals on hospital campuses in order to receive referrals from the institution. Affiliations also give you access to services like surgery and delivery that you wouldn’t find in a single medical office building.

3. Traditional office buildings

Traditional office buildings can be preferred by doctors who do not want to be located near other medical practitioners, or those that do not need special medical office features (like exam rooms). Traditional office buildings are a popular choice among healthcare professionals looking for commercial real estate. Patients can interact with other professionals or corporate-based entities in an office setting, which provides a familiar experience. Furthermore, when physicians establish their medical business in a standard office location, they generally have access to shared amenities like restrooms, lobbies, and conference rooms. Because many of the building’s systems and amenities serve and benefit many tenants, most office buildings also provide greater help and maintenance from landlords.

4. Retail spaces or shopping centers

Retail spaces or shopping centers are mainly targeted towards medical professionals that offer highly specialized services or products (i.e. ophthalmologists, or dermatologists). Buying a medical office in an existing retail space or shopping center is a good real estate deal for medical practitioners. Other commercial property types often provide less visibility, exposure, and signage than retail areas.

There are also opportunities outside this to invest in multifamily, industrial, storage and other specialized properties like hotels, senior living etc which can create significant value for the physicians overtime and it can offset income from other real estate holdings by using depreciation. Physicians can also invest in these property types through syndication or creating JV’s

Conclusion:

Each type of real estate property has its pros and cons, but one thing to keep in mind is you’re not limited to these four types! You can choose any type of building that suits your medical practice best.The basics of good commercial real estate properties for healthcare professionals revolve around three main points: security, efficiency and style.

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