Finding a property that will be the right fit for your medical practice now and into the future is no simple task.
You are looking for the perfect location, facilities that match your area of medical specialty and ones that support optimum healthcare experiences for your patients, as well as a site that offers scope for your business to grow. There is a lot to consider and engaging a commercial real estate agent who has the knowledge and experience to help you secure the property you need will be critical.
Specialist healthcare property broker Bryce Stickland, principal of Rx Property Australia, has spent more than a decade building his combined expertise in healthcare, business development and real estate. He spoke to us about the key things to look for in an agent when purchasing medical property.
1. Industry knowledge
Property agents with detailed knowledge and experience in the highly nuanced healthcare sector represent only a small portion of Australia’s commercial real estate community, but, as Bryce explains, it is vital to seek out these industry-specific agents who can bring the niche expertise needed to your purchase or leasing journey.
“Your agent will be working with you to identify a property or facility that can meet your needs and the demands of an ever-evolving healthcare landscape,” Bryce says. “This means they must have a detailed understanding of how both clinical and consultation environments operate.”
For example, the physical environment of a General Practice and the facility needs of primary care can be very different to those required in a specialist medical practice, whilst the burgeoning field of allied health represents further nuance. Bryce says a keen understanding of changing modes of healthcare delivery and emerging trends in health consumer behaviour are also important.
“Your agent needs to be across a whole host of industry-specific issues,” he says. “From collocation of services and referral generation, through to things like the shift towards greater sub-specialisation in medicine and built environment considerations, such as practice layout, building classes, disability access, building design elements and parking for patients.”
2. The right style of agent
Although the field remains relatively small, there is variation in the types of agents operating within commercial real estate’s medical and healthcare space and Bryce suggests knowledge of these will assist medical professionals in assessing the style of agent that will be right for them.
“I would categorise agents working in this space into four groups,” he explains. “There are buyers agents, social infrastructure specialists, business brokers, and then people like myself who cover a spectrum of healthcare asset advisory services; from asset origination through to strata suite sales, purchasing and leasing.”
The buyer’s agent (or ‘tenant representative’, if leasing options are being explored) will work with a medical or allied health professional to source property options that meet their needs. This may be established medical practices, new site options, or commercial office spaces with potential to be converted into a medical space. The buyer’s agent will then negotiate with the seller on behalf of their buyer to secure the best price.
Social infrastructure specialists work in a broad range of sub-sectors, of which healthcare is just one (others include aged care and child care). These specialists are often engaged to source undeveloped land holdings for the establishment of a medical practice or healthcare facility. However, their remit also extends to sourcing and negotiating the purchase of established practices and facilities.
Business brokers are licensed agents acting on behalf of a vendor. They will assist the business owner to prepare a practice and property for sale and then liaise with prospective purchasers to broker the best price.
Bryce describes the Rx Property Australia approach as different to all of the above. His agency is carving out its own area of sub-specialisation, which he classifies as ‘integrated health centres’.
“I work with medical professionals, hospital operators, developers, and real estate investment trusts to facilitate the formation of medical communities in both new and existing projects,” he explains.
3. One who will help you build your property brief
Feeling a little overwhelmed with the task of identifying a desired location, price range, key features, and overall site scope for your new medical property? Does the phrase, ’I’ll know it when I see it’ sound like you?
The right agent will be ready to guide you through a detailed identification process that builds the ‘brief’ on exactly what you are looking for in a property. Bryce notes that this is where an agent’s industry knowledge and tailored approach for medical professionals must come to the fore.
“Fundamental to developing the property brief is the agent working with the medical professional to diagnose where they are at in the life cycle of their career,” he says.
“There are, of course, different phases of career development for doctors and other healthcare professionals and determining the right property option during a specific phase is critical to achieving both financial gain and professional fulfilment,” Bryce says.
- Are you a medical professional in your first five years of practice and the ‘brand creation’ phase of your career?
- Have you been practising for longer and are now ready to open your own practice?
- Is this consolidation time and a point at which you can consider venturing into investment in a private hospital or similar health facility?
4. An agent with an exemplary referral network
Medical professionals know the value of a good referral—in healthcare it can be everything. Well, so too are expert referrals critical to the purchase of medical property.
Advice on issues such as zoning and planning regulations, building codes and compliance, site access for the disabled, and the demographics of an area can make or break a project’s viability for a prospective purchaser. This is where the referral network of an agent will come into play.
The right agent, Bryce explains, will have a book of tried and tested experts who can assist with these professional services. For zoning and planning regulations, the agent will be able to refer to reputable architects or town planners. Bryce notes that more generally, knowledge of the LEP (local environmental plan) and zoning FSR allowances should be able to be accessed by an agent. In relation to building codes and compliance, the agent will refer to accredited surveyors and compliance professionals.
When it comes to advice on demographics of the area and insight on local competition (i.e. other healthcare providers operating in the locale), Bryce says while general market commentary can be provided by an agent, they are likely to suggest formal engagement of a research service to thoroughly assess prospective purchase sites.
5. An agent who can pivot
The pandemic has brought the ‘pivot’ into sharp focus for business in every sector. Healthcare providers have had to adapt quickly to new protocols and learn to manage patients in new ways. Bryce notes the increased demand for Telehealth services and the need to ‘pandemic-prepare’ healthcare settings through built environment modifications as just two examples.
“Really, the pandemic has been a catalyst for transformation in the health sector,” he says. “We are seeing a rapid shift towards the integration of health services—ambulatory care is being co-located with surgical services and large scale health hubs are being developed.”
Bryce suggests these changes could leave medical and allied health professionals who are operating in stand alone premises at a disadvantage. “If you are looking to future-proof your medical practice in this rapidly changing landscape, you need to be talking to an agent who can help you assess your place in the market,” he explains. “With currently record low interest rates, purchasing a strata unit in an integrated health centre may be the right option,” Bryce says.
“Or, in tightly held areas, a lease may be the gateway to accessing premium healthcare space,” he says.
“A nimble agent will be able to identify options and advise you on the pros and cons of each,” Bryce says.
Sign up for more stories like this: Get MRO’s blog articles sent direct to your inbox by registering below.