Medical offices are just what the doctor ordered for landlords

Healthcare tenants pay 95% of rent collections

National /
Apr.April 14, 2021 10:59 AM
Doctors and medical professionals have remained on time with their rent payments in the past year (iStock)

Doctors and medical professionals have remained on time with their rent payments in the past year (iStock)

Medical offices have been a bright spot for real estate investors during the pandemic, despite the fact that telehealth saw a boom during the pandemic.

Doctors and medical professionals have remained on time with their rent payments in the past year, unlike other office tenants, the Wall Street Journal reported. While some tenants have paid less than 85 percent of rent collections, medical professionals have paid 95 percent of rent owed.

And despite in-person visits falling 60 percent early on in the pandemic, telemedicine appointments accounted for just over 8 percent of visits in December, indicating that patients are going back to offices.

Property owners have continued investing in the field. While sales volume for all commercial real estate dropped 32 percent in 2020 compared to the year prior, $11.2 billion worth of medical office buildings were purchased in 2020. That’s only slightly below the $12 billion worth of properties bought in 2019.

Major players are now entering the field. MedCraft Investment Partners launched a $500 million fund in January that will be dedicated to medical office acquisitions. Additionally, Kayne Anderson Real Estate is closing a $2.5 billion fund that will devote half of its fund to medical offices.

“There will be a place for telehealth in the future,” Mindy Berman, JLL’s healthcare group leader, told the Wall Street Journal. “But it’s not going to replace the need for bricks and mortar.”

[WSJ] — Sasha Jones






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