Buying A Medical Office Condo
Medical Office Today By: Sibley Fleming
For many doctors, a medical office condo offers the opportunity to own their own space. Physicians typically buy condos on the same basis that homeowners buy homes – owning is preferable to renting. In the beginning, the medical office condo is brand new, the floor plate can be molded to exact specifications and no major maintenance issues have cropped up.
The question of whether or not it makes financial sense for a physician to purchase a medical office condo is completely dependent upon the location and comparable lease rates, according to veteran Miami developer Kenneth Weston. Over the past four years, Weston has completed about 1.5 million square feet of medical office condo space in South Florida. “The rule of thumb is: if you can purchase a condo with 80% to 100% financing and it comes relatively close to what it costs you to rent, then you’re in the ballpark,” says Weston.
Another of Weston’s cardinal rules – don’t invest in a medical office condo unless you’re a user.
South Florida developer Weston advises that physicians should be established before considering a purchase. “A physician or healthcare provider should have plans to stay in that location well over five years and it’s important that they not need the money to subsidize other areas of their practice,” he says. “The reason these types of products work well for physicians is typically they never move, or very rarely move. In other words, physicians don’t upsize and downsize like an insurance company.”