Posted by Brian (No CA) on October 11, 2004 at 17:59:04:
I appraise a lot of medical office buildings in N. Ca and the newer projects are leasing NNN rather than medical gross. That’s just the way things are going out here, presumably because it’s easier for the LL.
Medical gross expense basis typically has the tenant paying for utilities (either separately metered for pro-rata) and janitorial.
Medical office is pretty similar to professional office except the obvious like more extensive plumbing and perhaps electrical power. Now if you have a small outpatient surgery center for instance then things get a little different, but run of the mill medical office is pretty straight forward. Leases typically run 5 to 10 years, or longer if a portion of a hospital is leasing a larger amount of space there.
Just make sure you know your market rent and vacancies and you should be alright. Offices near a hospital or medical center are normally more desirable.
That’s the basics, hope that helps.