Medical office buildings (MOBs) weathered the recession better than any other type of real estate, with the possible exception of apartment buildings.
- Lease rates are 20% to 50% higher than general office space
- Doctors spend 2 to 5 years’ worth of rent on tenant improvements
Medical offices in Frederick typically have no shortage of investors. Lease rates are 20% to 50% higher than general office space, due to specialized infrastructure required by medical tenants. Additionally, doctors spend about 2 to 5 years’ worth of rent to improve the spaces they lease for their practices, and as a result tend to sign longer-term leases. And—the icing on the MOB cake—vacancy rates run 1.5% less than rates for general office spaces.
T.J. Drive has long been the center of Frederick County’s medical office universe. There are new opportunities to lease or buy medical space on T.J. Drive in development, with the repurposing of the Antique Station building and new-build projects by Ausherman and Zahler, that offer investment opportunities.
And the boundaries of Frederick’s medical office market are growing. Frederick Memorial Hospital recently opened a regional satellite medical center off of Crestwood Boulevard, near the Conley Farms office park project where build-to-suit condos are attracting medical tenants. FMH also purchased the nursing home on 7th Street across from the hospital, with plans to redevelop that site into new medical offices.
If you have questions about becoming an owner or tenant of a Frederick medical office building, Steve Cranford can lend an expert guiding hand.
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