September 1, 2016
By Dennis Kaiser
Medical office buildings (MOBs) are emerging from the shadows of CRE. Newport Beach, CA-based Real Estate Development Associates (REDA) is developing a 64,000 SF, two-building MOB, in Newport Beach, that provides doctors an opportunity to expand their practices.
Connect Media asked REDA Principal Jason Krotts what’s driving this new generation of MOB’s in our latest installment of 3 CRE Q&A.
Q: Why are MOB’s gaining in popularity, and why are they attractive CRE investments for doctors?
A: Physicians have realized that real estate is a fixed monthly cost, and they’re learning to leverage technology to be more effective in their business operations. REDA is developing its Newport Heights Medical Campus to provide the infrastructure and technology base so physicians can more efficiently run their businesses in this modern day of technology and instant gratification.
Q: What factors are driving development of MOB’s in Orange County?
A: We’re noticing an extremely limited supply of medical offices in the area. In fact, vacancies are at 4.7% in the region, and we know that’s very tight and warrants new product. To that point, this new campus is going to provide all types of out-patient medical practitioners the space needed to start or expand their practice, or make it more efficient to serve the community.
Q: How do advanced MOB’s differ from previous generations of facilities? What are some examples of the advantages they offer?
A: These buildings are brand new, which is a major opportunity for the medical community in the area because more than 75% of the medical office space in the area was built before 1990, and is therefore outdated in technology, flexibility of floor plans and other internal systems. There was a bit of product that was built nearby in the ‘90s, but it’s 100% full. Even the few other old spaces that have been renovated don’t offer the opportunity that this Newport Heights Medical Campus will provide. Gone are the days of storage rooms and filing cabinets, now that space can be used for patients or other necessary equipment.
Among the advantages are:
One example situation is of two doctor friends: One is a dermatologist and the other a plastic surgeon, and they keep office hours on separate days of the week. The technology/bandwidth and flexibility that REDA is building into the property lets them share the same space.
The waiting room TV can be switched to display content appropriate to whichever doctor is on duty that day, patient data is kept private but accessible via different computer log-ins to the Cloud, and even the artwork can be digitally changed to match each practitioner’s style.
For comments, questions or concerns, please contact Dennis Kaiser