With the aging of the Baby Boomer population in the United States, comes an increase in medical needs. This generation is living longer and their medical needs are increasing, making the STNL Medical space just what the doctor ordered.
Two tenants in particular to keep an eye out for, both leading providers in the STNL healthcare/medical sector, are DaVita Dialysis and Fresenius Medical Care. With both tenants investing a great deal of their own capital in the build-outs and installation of their required equipment and machines to treat patients, the likelihood of these tenants sticking around is strong. These build-outs are costly and because of this, these tenants tend to remain in place and are more likely to sign longer-term leases, providing a level of security for the investor. Additionally, due to the nature of their businesses (kidney dialysis), patients are required to visit on a routine basis that creates a reliable income stream for the particular location. Additionally it is also harder for these tenants to pick up and move not just due to their enormous capital infusion into their build outs but due to the fact that particular locations receive certificate of occupancy for a specific location so they will not look to move down the street once their lease term burns down as this would require a new certificate to be granted which is not easy.
Not looking to break the bank on an investment? This is another reason to look at this asset class. Typically trading between $1-$3m, these assets are very attractive to private buyers, allowing first time commercial real estate investors to get into the game and are great investments for experienced investors as they look to add to their existing portfolios.
As the population continues to age, the medical/healthcare sector will continue to be a strong asset to own!