This page has been rewritten as a practical decision guide. It does not reproduce an earlier news report or claim that a historical market trend remains current.
Underwrite the property, not the label
A medical office description does not establish reliable income, low risk or a good purchase price. Start with the specific building, executed leases, operating history, capital requirements and your ownership objective. Keep assumptions visible and distinguish reported figures from documents that have been reviewed.
Reconcile the income
Compare a dated rent roll with signed leases and amendments, collections and operating statements. Identify expirations, options, concessions, arrears, deposits, guarantees and landlord obligations. Have the relevant advisers resolve discrepancies before treating projected income as dependable. Separate occupied space, available space and any income that depends on a future event.
Understand concentration and replacement exposure
List how much income depends on each tenant, when leases expire and what evidence supports the tenant’s obligations. Consider how another occupier could use the space if a tenant leaves. Specialized layouts and equipment can create different replacement requirements. Do not assume that nearby healthcare activity or a familiar operator name guarantees demand or credit quality.
Inspect the physical and operating commitments
Review the building condition, maintenance records, access, building systems and the scope of any proposed work with qualified professionals. Obtain relevant plans and approvals. Ask the team to identify accessibility and use questions that need further review. The Department of Justice publishes medical-care accessibility guidance, but a web checklist does not certify a particular building.
Test several ownership cases
Compare the base case with delayed leasing, a major tenant departure and additional capital work. Use explicit assumptions for downtime, concessions, leasing costs, operating expenses and financing. Keep the calculation separate from the decision about acceptable risk. Request evidence for any forecast of market rent, absorption or resale value.
Finish with an evidence list
For every unresolved item, record the document needed, responsible adviser and decision deadline. Decide whether to proceed with further review, change the offer assumptions or stop. FIP can help frame the property and transaction discussion. Valuation, financing, tax, legal and technical conclusions require their respective professional review.
Sources and further reading: DOJ medical-care accessibility guidance.