You may have heard that medical facilities are gaining in popularity, and that investors all over the world are rushing to invest in this hot asset type.
Most medical facilities, however, are more businesses than investments, and require intensive management from skilled personnel in order to run smoothly and bring in profits.
If you’d like to invest in a medical center without the hassle of management and with minimal financial responsibilities, then you might be interested in learning more about urgent care centers, which are being quietly snatched up by smart investors.
What Is An Urgent Care Center?
Urgent care centers offer medical care without an appointment to those seeking medical treatment for non life-threatening injuries or illnesses.
Urgent care centers are particularly in demand because of their availability during hours when primary care providers are closed, such as nights, weekends, and holidays. Patients prefer to go to urgent care centers instead of emergency rooms, which not only cost more, but are uncomfortable and have long waiting times.
The large number of Baby Boomers and Millennials has also positively affected the urgent care industry. Millennials are attracted to the fast and affordable health care, and are actually more likely to visit an urgent care center than a primary care provider.
Baby Boomers, on the other hand, are finding that urgent care centers are easier to access than traditional health care services. They are also less comfortable traveling long distances to see a physician, and view urgent care centers as a convenient way to run errands and see the doctor, all on one trip.
The majority of urgent care centers offer on the spot lab results, X-ray machines, and other technology. Wait times for results are much less than emergency rooms, and some are even handing out pagers to patients who prefer to explore the mall rather than sit in the waiting room.
Urgent care physicians see a wide variety of ailments, but the most common illness treated at urgent care centers in the U.S. are upper respiratory conditions, and the most common procedure was wound repair.
Strong Demand for Urgent Care Centers Spurs Growth
Same-day delivery service and other on-demand services have resulted in high consumer demand for 24/7 care in the medical arena as well.
Many Americans also face difficulty in finding a physician, and even those that have adequate health care are turning to urgent care centers to avoid high deductibles. For many plans, emergency room visits can cost more than eight times the cost of an urgent care visit.
Out of more than 7,357 urgent care centers in the U.S (last measured in 2017), 95% of centers had wait times of less than 30 minutes, and only 3% of patients were referred to emergency rooms after visiting an urgent care center.
Growth has been steady for the last few years, and in order to keep up, 300 to 600 urgent care centers are opened up around the country each year.
Urgent Care Centers Are Conveniently Located In Retail Areas
A new trend in urgent care is the placement of centers in high traffic spaces such as malls.
These locations are preferable since they are placed where prospects live and shop, making them highly visible and easy to get to. More landlords have begun to welcome centers with open arms, particularly since many brick and mortar tenants are failing rapidly in the face of stiff online competition.
Investors have begun to realize that the higher credit ratings, increased stability and foot traffic can boost business for other retail businesses within the same area, and since everyone needs health care at some point, are fairly recession-resistant.
At the same time, savvy urgent care owners realize that the foot traffic and convenience of a mall or other retail center are a boost to business.
Some are even going a step further, utilizing demographic and patient data to find their best patients and aid in siting locations for new centers. These owners are looking for Class A properties in highly visible locations with good signage, ingress/egress, and a population density of at least 50,000 people – and are willing to pay premium prices in order to obtain them.
Some investors have faced some pushback on including urgent care centers in the mix. Some tenants hold on to leases that discourage or prevent investors from including any type of medical office on site, while others are leery of the potential effect on shoppers exposed to possibly disturbing scenes of injured or ill patients.
Despite these concerns, the lower price points, lease bumps, and triple net leases make urgent care centers an attractive option to many investors. In fact, in 2017 private investors bought 66% of the net lease medical properties on the market.
In all likelihood, the continued aging of the population, and the difficulty in transferring this asset type to an online model make this a good option for investors interested in retail triple net lease properties.