Managing Medical Offices

September 27, 2023 | By: CRE Insight Journal

Managing medical offices requires unique considerations compared to other commercial real estate types. This article will delve into the distinctive aspects of managing medical offices, including the differences compared to other commercial properties; how tenant engagement is managed in these unique settings; the special build-out considerations; and how these nuances affect the broader landscape of real estate.

Differences in Managing Medical Offices vs Other Property Types

Property management in commercial real estate is an intricate endeavor, shaped by the property type, tenant requirements, and regulatory frameworks. For medical office buildings (MOBs), these elements intermingle, adding layers of complexity to regular property management tasks.

Unlike standard offices or retail spaces, MOBs often house sensitive patient data, necessitating robust security measures. As a property manager, you must ensure that these offices comply with data privacy laws like HIPAA. This means IT infrastructure must be secure and regularly audited to ensure compliance with legal and contractual requirements. Standard office or retail spaces rarely face this level of scrutiny on data handling, though this depends on the unique tenants at a property.

Additionally, MOBs must meet stringent sanitation standards due to the health risks involved. Regular, thorough cleanings are more frequent and more intensive than what’s typically done at most commercial properties. Consequently, property managers must coordinate with specialized cleaning services and understand the regulatory requirements associated with medical sanitation.

Further, MOBs have more demanding parking requirements. Patients may need close access to the entrance, necessitating more handicap parking spaces than typical commercial or industrial property. Visitor turnover is generally higher as well, due to the nature of appointment-based visits.

Engaging with Medical Office Tenants

Engagement with tenants is crucial in any property management setting, but when dealing with medical professionals, this engagement takes on a different dynamic. Medical professionals are heavily focused on patient care and outcomes, and as such, they require an environment that supports their work without adding stress or distraction.

Understanding the medical practice’s needs and schedule is essential. Medical professionals work long hours and need to know that building management is available and responsive to their needs at all hours. Further, the property manager needs to proactively communicate any changes in the building that could affect the practice, from major renovations to simple maintenance work.

The ability to understand and speak to the unique facets of medical operations is also crucial. Understanding terms such as patient flow (how patients move in your MOB), electronic health records (an EHR is a real time, digital version of a patients chart), or specific medical imaging tools can go a long way in building relationships with medical tenants. Being knowledgeable about medical-specific needs helps establish credibility and fosters a more collaborative relationship.

Special Considerations for Medical Office Buildouts

Buildouts in a medical office are markedly different from other commercial or industrial spaces due to the specific needs of healthcare providers. From the design stage, understanding medical workflows is crucial. Medical office floor plans need to accommodate waiting areas, examination rooms, private offices, labs, and spaces for medical equipment.

In addition, medical offices need to comply with the Americans with Disabilities Act (ADA) regulations, which demand that facilities be accessible to all patients. Thus, the design needs to take into account factors like doorway widths, ramp slopes, and restroom layouts to ensure all patients have equal access to the property.

Medical offices often require specialized ventilation systems for infection control and to handle chemicals used in medical procedures. As a property manager, you’ll have to coordinate with HVAC experts and service providers to meet these unique needs. Additionally, many medical offices use sophisticated and sensitive equipment. This equipment may require special electrical wiring, floor reinforcement, or radiation shielding. Not considering these during the build-out phase can lead to significant costs and delays down the line.

What to Expect in MOBs

Managing MOBs involves a steep learning curve compared to general commercial or industrial real estate, but it can also be extremely rewarding. These properties often command higher rents due to the specialized needs and buildouts. Healthcare tenants also tend to be more stable, as their services are in constant demand and less influenced by economic fluctuations.

However, property managers must navigate the complex regulations surrounding healthcare provision. Medical offices are heavily regulated by federal, state, and local entities. Compliance failure can result in substantial penalties and damage to reputation.

The healthcare sector is rapidly evolving due to technological advancements and changes in healthcare policy. As a result, property managers need to stay current on these changes to ensure their properties remain competitive and desirable to medical tenants.

Managing Medical Offices

Managing medical offices in commercial real estate is a specialized discipline that requires a unique skill set. From understanding the specific needs of healthcare tenants to navigating complex regulatory environments, medical office management can be challenging. However, the rewards of stable, long-term tenants and higher rents can make it a valuable addition to a commercial property manager’s portfolio.

By focusing on effective communication, ensuring compliance with regulations, and understanding the unique requirements of medical offices, property managers can effectively engage with this critical and expanding sector of the commercial real estate market.

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