Banking on Baby Boomers

Banking on Baby Boomers
By: Nicholas A. Dunlap 

The effects of an aging population can certainly be seen in the commercial real estate landscape.  For a number of commercial real estate owners, this has been a game changer.  From expanding current uses to include medical office or traditional medical space, to simply catering to the needs of retirees, smart landlords are quickly responding to these needs while filling their buildings and increasing their effective gross income.  

Please see Part I of my recent column in the Journal of Property Management as included below.   

As of January 1st, 2011, approximately 10,000 baby boomers per day began turning 65; a trend that will continue until the year 2030.   Of course in America, 65 signifies retirement or at least retirement age.  And one of the unfortunate facts of life or negative aspects of aging is an increase in the number of doctor visits and an increase in the amount of money spent on health care.  So while there is nothing we can do to stop the hands of time, there certainly is something that real estate owners can do to capitalize on the trend of an aging population.     
Know Your Market
Many cities lack the space for medical centers.  That is, they lack the land or potential locations for new hospitals or doctors’ offices.  Not to worry, many an office building has been converted into a partial or full medical office building via the CUP process otherwise known as obtaining a Conditional Use Permit.  Navigating the CUP process can be costly and can also require patience, but whether you hire an outside contractor to act on your behalf or you do it yourself, you will likely find that the financial return will justify your outlay of capital, time and effort. 
Understanding the supply and demand for medical space in your market can help you determine whether to consider applying for a Conditional Use Permit.