Medical office sector — a healthy market

TRD New York /
Apr.April 29, 2009 02:59 PM

At a time when the value of commercial real estate is
decreasing along with investor interest, one sector which remains
healthy is the medical office market, according to a report from Marcus
& Millichap Real Estate Investment Services.

“Parts of the country have seen underperforming medical office assets, but the segment is generally holding up better than other product types,” the report says. “Medical office properties continue to garner investor demand, partly because of the positive state of the healthcare industry.”

More than 17.5 million square feet of medical office space was completed in 2008 and 16 million in 2007, with 13 million projected for 2009, said Alan Pontius, senior vice president and managing director for Marcus & Millichap’s Healthcare National Office and Industrial Properties Group in San Francisco.

In the New York City market, a California-based investment company that owns and operates a free-standing ambulatory surgical center, recently purchased four office condominiums totaling 14,000 square feet at the 12-story, 159,359-square-foot office building known as 3 Dag Hammarskjold Plaza, at 305 East 47th Street. The buyer paid $9.5 million, or $679 per square foot, for the site. The purchaser plans to operate an outpatient ambulatory surgical center which will be licensed by the New York State Department of Health and approved under Article 28 Certificate of Need.

The softening of the economy and the rise in office vacancies may make it easier and less expensive for doctors to move. And with cheaper prices for materials and dropping labor costs, the time is ripe for investors to purchase sites for medical use.

Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
President Donald Trump with developer Steve Witkoff, John Catsimatidis and Blackstone’s Stephen Schwarzman (Getty; iStock)

“That was a business decision”: Why real estate execs are backing Trump — or backing away

“That was a business decision”: Why real estate execs are backing Trump — or backing away
New York City restaurants have struggled to make rent throughout the pandemic but August marked a new high. Andrew Rigie of the NYC Hospitality Alliance (Getty; Institute of Culinary Education)

Rent struggles for NYC restaurants now worse than ever

Rent struggles for NYC restaurants now worse than ever
Companies are relying on surveys and other data points to determine who will come back to offices first. (iStock)

How do companies decide who should return to offices first? It’s tricky

How do companies decide who should return to offices first? It’s tricky
Council member Laurie Cumbo  and a rendering of the Bedford-Union Armory (Getty; Bedford Armory)

Student suspended after blasting lawmaker’s pro-development stance

Student suspended after blasting lawmaker’s pro-development stance
The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

US housing supply reaches nearly 40-year low

US housing supply reaches nearly 40-year low
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...