Through Online Market place portals such as R2Crowd, doctors and medical professionals now have the ability to invest in the properties that they typically work out of.
First of all what does an investment like this comprise of?
Take for example, one of the deals (which is open for investment currently on R2crowd portal):
Two-state-of-the-art medical office properties. 304 Victoria Street North and 414 Victoria Street North (the “Properties”) are leased long term to medical professionals and the property is strategically located in the downtown core of the City of Hamilton, close to Hamilton General Hospital. 304 Victoria St. N. is a five-story building that comprises 38,828 square feet and 414 Victoria St. N. is a single story building that comprises 47,271 square feet. The Properties cost $38.5 m and $2.3 m is available for R2Crowd investors. This project is expected to return 13.4%* over a 5-year period.
•Two state-of-the-art Medical Office Buildings in Hamilton, ON
•Long Term Leases – with GPs, Medical Clinics and Specialists
•Strategically Located – Walking distance from Hamilton General Hospital
•Strong Management Team – Gross Capital has been in business since 2003 and manages over 4 million square feet of real estate, including 17 medical office buildings.
•Targeted Investor Return/Yr*: 13.4%
•Targeted Annual Cash Yield: 7.0%+
•Targeted Investment Period: 5 years
•Minimum Investment: $10,000
•Distribution Period: Monthly
So, what makes a medical office building such a good investment?
Medical Office Buildings are recession resistant to a large extent
Whether the economy is slow or booming, everyone – sooner or later – needs to see the doctor. And although medical office buildings do require specialized infrastructure and can be management intensive, the type of tenant tends to vary, allowing investors a wide variety of tenants to choose from.
Tenants are well diversified
The mix of tenants in medical buildings is by no means uniform, and can differ widely from one location to another. Finding the right mix of tenants to occupy a medical building depends on several factors, especially since some are specifically commissioned by a hospital or group of doctors, while others are redeveloped industrial or office spaces that have been converted. Regardless, once the right tenant mix is achieved, tenants are highly unlikely to leave, since they’ve come to rely on one other in order to provide services to their patients.
Medical Offices Produce Stable Cash Flow
With supply low and demand high, medical office buildings are a premium investment for investors. Moreover, due to the numbers of seniors requiring health care and the expense and difficulty in relocating, tenants typically sign long-term leases that allow them to remain in one location. When a physician owner decides to capitalize on their property’s equity by selling it and leasing it back, they gain additional funds to expand their practice, while the investor reaps the benefits of owning a net lease property. The long terms leases, regular payments and higher return of the medical net lease property are a particularly ideal property for those looking to expand their investment portfolio with an income property which possesses excellent long-term value.
Interested in learning more?
click on the link(s) below to attend one of our upcoming investor seminars:
* Note: R2Crowd is an EMD in Ontario and 6 other provinces. Full disclaimers are found on our web portal. The post above is not an invitation to sell by itself but simply a case study for education purposes. All investments are made in consultation with the DR’s of R2Crowd after risk suitability assessment and other criteria as prescribed under The Securities Act have been fulfilled.