Considered recession-proof due to its mission-critical and demand-driven nature, medical real estate is one of the hottest asset classes. Because mistakes can be costly, Trisha Talbot wrote an article for In Business outlining four steps for a more thoughtful, data-driven approach to healthcare real estate investment.
Although increased demand, low tenant attrition and limited speculative construction keep vacancies considerably lower than the traditional office building sector, doing homework before investing is still imperative for success. Trisha recommended potential investors take the following actions:
- Talk to someone familiar with the asset class: Experts in medical properties understand the big picture and ensure investors have enough in reserves.
- Choose trustworthy investment partners and define each one’s role: An operating agreement defines partners’ contributions and how returns will be distributed.
- Establish a banking relationship: Lenders can determine the terms of debt service, borrowing and payments to home in on affordable properties and avoid recapitalization.
- Analyze income and risks: Leasing income should both support expenses and provide profit. Ideal properties have some kind of “stickiness” that makes it difficult for tenants to leave.
With more than 20 years of experience in healthcare real estate, Trisha helps clinicians and investors identify income-producing healthcare properties and increase profits. She is widely lauded for her expertise, leadership and performance, consistently ranking among the state’s top commercial real estate brokers for more than a decade.