Marketing medical real estate effectively requires an understanding of the unique needs and motivations of healthcare providers. As the healthcare industry continues to grow and consolidate, competition for prime property is heating up.
Whether you’re selling a medical office building, surgery center, or hospital, using the right marketing strategies could mean the difference between a long slog and a bidding war.
Here are some of the top tips for marketing and selling your medical real estate investment:
Focus Your Marketing
Understanding who the likely buyers of your property will be is key to an effective marketing plan. If you have a small medical office condo, local physician investors are likely your target. A surgery center or imaging center, on the other hand, may appeal to regional hospital systems looking to expand outpatient services. And institutional investors like real estate investment trusts (REITs) are often buyers of large portfolio medical office properties.
Create marketing materials tailored to each of these buyer groups. Include details like the property’s proximity to hospitals and patient demographics that would matter to them. Leading with the most relevant information will make your marketing more compelling.
Tout Location and Population Growth
While healthcare real estate can sometimes seem recession-proof, location still matters for sustainable long-term growth. Emphasizing population growth and development in the surrounding community makes a property more attractive. Showcase not just current demographics but projected growth in both patient base and competing medical properties. This demonstrates future demand and scarcity value from a fixed supply.
Similarly, proximity to anchor institutions like major hospitals and healthcare systems is another key selling point for medical office space. Detail transit times and driving access between your property and these facilities. Healthcare providers want to locate near these anchors to make referrals easier.
Focus on Turnkey Buildouts
Tenants and buyers want medical real estate move-in ready. Having spaces already built out for exam rooms, procedure rooms and imaging facilities saves major construction costs. Make sure your marketing materials highlight specifications of HVAC systems, backup generators, medical gas lines and the IT infrastructure needed for EMR systems. Feature a floorplan showing procedure and exam rooms if available.
Streamlined local permitting and compliance documentation will also appeal to buyers. Transferring licenses, certificates of need and accreditations can be headaches they’ll want to avoid.
Leverage Industry Connections
Networking directly with brokers, healthcare executives and industry influencers is crucial when selling medical real estate. Attend conferences and events to connect in person. This space often moves through word-of-mouth, so directly pitching your listing to relevant players is invaluable.
Local medical real estate brokers catering to the healthcare sector should already have relationships with regional hospital systems and medical groups. Bringing one on as your listing agent lets you leverage their professional network for potential buyers.
Market as Stable, Recession-Resistant
Healthcare has weathered economic downturns better than other commercial real estate sectors, from retail and office to multifamily properties. Emphasizing steady, reliable returns backed by an investment-grade tenant roster shows the stability of your asset.
Publicly traded healthcare REITs and institutional buyers want recession-resistant properties. Promote long-term net leases with hospitals, large practice groups or surgery centers as a way to lock in durable income over a 10+ year horizon.
Offer Triple Net Leases
Triple net (NNN) leases are common for single-tenant medical office spaces and essentially transfer all operating costs for taxes, insurance and maintenance to the tenant. This appeals to investors focused on passive income. Marketing your property as NNN shows buyers they can own it almost expense-free.
Be Transparent On Restrictive Covenants
States and municipalities place all kinds of operating restrictions through Certificates of Need and healthcare service area regulations. Florida no longer requires a Certificate of Need. Detail any limitations for expansion or addition of medical services upfront before entering negotiations. Surprises late in the sale process can sink deals after much time invested on both sides.
Lean On a Qualified Appraiser
Getting an appraisal from an experienced commercial medical real estate professional ensures you have trusted opinions of fair market value and optimal pricing strategy. Detailed valuation comps versus recent sales of similar properties will make your asking price credible. Appraisals also account for any prevailing sale terms and concessions typical for your local market.
Executor Sales Often Need Finesse
Estates and divorce settlements sometimes force the sale of medical real estate assets. But heirs may have unrealistic expectations on property value, while not understanding sector nuances. Seasoned brokers can market these listings while educating heirs and their advisors on pricing accordingly. Getting full market value hinges on setting expectations accurately from the start.
Patience Is Key with Bank-Owned Products
Distressed medical properties, like those needing the assumption of a defaulted commercial loan, require diligence. There may be valid reasons why a property’s previous owners failed, like changes in local competitive dynamics. Tempering your marketing timeframe expectations and not overplaying the investment angle sets the right tone with buyers.
Highlighting population growth, turnkey buildouts ready for the next owner, and stability backed by credit tenants will serve you well when marketing medical real estate. Leverage professional connections and be flexible with unconventional situations. With the right approach, you’ll maximize the value achieved in a sale.
