Medical office properties offer Philadelphia exchange investors stable, long-term income from healthcare tenants who typically sign longer lease terms than traditional office tenants. The asset class benefits from demographic trends including an aging population and increasing healthcare utilization.
Philadelphia's medical office market includes on-campus facilities adjacent to major health systems, off-campus medical office buildings, and specialty facilities like ambulatory surgery centers and imaging centers. Each property type presents different tenant profiles, lease structures, and regulatory considerations.
Our team helps investors navigate the unique aspects of healthcare real estate, including Stark Law compliance, tenant reimbursement structures, and improvement exchange planning for medical buildouts. We coordinate tenant estoppel preparation, lease assignment review, and financing due diligence to ensure compliant exchange transactions.
How we support this asset class in Philadelphia, PA.
- • Stark Law and anti-kickback compliance checkpoints
- • Tenant reimbursement and payer mix review
- • Improvement exchange coordination for medical buildouts
- • Estoppel preparation and lease assignment support
Common situations.
- •Selling traditional office properties and moving into medical office for longer lease terms and more stable tenant bases
- •Exchanging from retail or other commercial properties into medical office for recession-resistant income streams
- •Consolidating multiple smaller medical office properties into larger facilities with health system tenants
- •Upgrading from older medical office buildings to modern facilities with better infrastructure and tenant amenities
Key considerations.
- •Tenant relationships with health systems and physician groups, as medical office tenants may have different credit profiles than traditional office tenants
- •Stark Law and anti-kickback compliance, especially for properties with physician ownership or referral relationships
- •Tenant reimbursement structures and payer mix, as changes in healthcare reimbursement can impact tenant financial stability
- •Improvement exchange planning for medical buildouts, which may require coordination with qualified intermediaries and tax counsel
- •Location proximity to hospitals and health systems, as medical office tenants often prefer on-campus or near-campus locations
Market insights.
Philadelphia's medical office market benefits from the region's strong healthcare infrastructure, including major health systems like Penn Medicine, Jefferson Health, and Temple Health. Submarkets near major medical centers in University City, Center City, and the suburbs offer strong tenant demand, while off-campus locations may provide better value but require careful tenant evaluation.