Medical Office Buildings or Retail Spaces? Which is better?
For healthcare practices, choosing where and what type of property to locate your business in is a decision that will impact your bottom line, earning potential, referrals, doctor-patient relationships and interactions, and more.
When deciding on a practice location, many healthcare professionals examine two primary commercial real estate options closely: the retail center and the standard or medical office building. If you are looking for a space dedicated exclusively to healthcare tenants, an office building might be for you. What about convenient retail locations with proximity to shopping, dining, or proximity to other non-medical businesses that often drive additional traffic to a property? Then a shopping center might be a better fit.
To compare the two, you’ll want to consider how important certain amenities and details are to your practice, including visibility, signage and exposure, window lines and natural light, property maintenance, neighboring businesses, accessibility, and parking. And of course, the consideration of cost. Here are some of the aspects you’ll want to mull over.
Advantages of Retail Locations
As demand for retail space surges, have you thought of converting a former storefront into a space designed for your healthcare practice? The industry term, “med-tail” has come on the scene recently, as more healthcare providers look to retail centers for their practice space for a number of reasons.
One of the first benefits of purchasing or leasing commercial real estate in a retail or shopping center is visibility. Exterior signage can be just as vital for certain healthcare practices as it is for public-facing retail companies looking for brand recognition. How much of your marketing strategy will depend on patients seeing your brand from the road or while walking to other stores or businesses? High visibility through exterior signage and exposure on major roads can vastly increase practice recognition—and profitability.
The accessibility of retail centers might be another advantage to consider, as most provide easy access off of major roads and convenient ingress and egress into the parking lots. Additionally, retail properties are not only developed with high-traffic flow and ample parking in mind, they’re also often near easily identifiable cross streets.
High foot traffic from shopping center patrons can be a major asset to consider. For example, you’ll gain recognition from passersby heading to stores, restaurants, or adjacent businesses. Many patients may also consider it an added convenience being able to frequent neighboring retailers in the same trip, making a high-volume retail center with pedestrians a great fit.
These benefits do come with a cost. In most metro areas, and all things being equal, a retail space will typically be more expensive than an office setting. Many practice owners look at this increased cost as a marketing expense. The more eyeballs that see your sign, with greater traffic and visibility, the more potential.
Advantages of Office Spaces
While retail locations have created an abundance of options for healthcare practices, some still prefer the stability of a traditional medical office space—one that creates a familiar experience for patients.
In general, neighboring occupants and tenants will also be in the healthcare or professional services space, providing related services for patients. This can mean valuable referral relationships with other specialists in the building or one-stop “shopping” for patients visiting both a general care physician and a pharmacist, for instance.
Inside, traditional medical office buildings may offer more natural light or better window lines than retail spaces. When it comes to maintenance or benefits, office buildings typically have systems and amenities that will benefit all tenants, such as shared restrooms, vestibules, lobbies, and common meeting spaces. And while the cost of both retail centers and office spaces depends drastically on location and quality of the property, traditional office buildings are generally priced more competitively, with both taxes and maintenance typically lower as well.
Compared to surface lots shared by other retailers or restaurants in shopping centers, parking available at office buildings may be in an adjacent garage or exterior lot, but is often ample room for both physicians and patients. Office properties may also reserve spots for people with mobility issues or pregnant patients or even create areas for patient drop-off.
Healthcare providers are constantly looking for innovative ways to deliver their services to patients, and finding the right location and space is the first step. The key is to partner with an expert healthcare real estate team to examine which spaces are available, accessible, and cost-effective for you. Your agent can provide you with a detailed breakdown of the pros and cons of both office and retail spaces—and how they can affect your bottom line.
CARR is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Every year, thousands of healthcare practices trust CARR to achieve the most favorable terms on their lease and purchase negotiations. CARR’s team of experts assist with start-ups, lease renewals, expansions, relocations, additional offices, purchases, and practice transitions. Healthcare practices choose CARR to save them a substantial amount of time and money; while ensuring their interests are always first.
Visit CARR.US to learn more and find an expert agent representing healthcare practices in your area.