Product Focus: How to boost MOB profits

EXPENSE CUTS CAN HAVE A BIG IMPACT, BOMA SAYS

By Murray W. Wolf

In a tough economy, controlling medical office building (MOB) operating expenses might be the best way to maximize net operating income (NOI) and asset value.

For example, if the operating expenses (opex) for a typical 42,000 square foot, suburban, on-campus MOB were 10 percent less than the national average rather than 10 percent more than average, about $1 million could be added to the value of the building.

But how can MOB owners and property managers know where they stand relative to the local and national averages? The answer is with benchmarking data that details income and operating expenses for MOBs across the street and across the nation.

That was the message delivered recently by Lorie Damon, VP, Education & Research, for BOMA International. Ms. Damon was speaking to the downtown Chicago chapter of BOMA at the group’s first MOB benchmarking and trends conference. The event was held Oct. 21 on the University of Illinois at Chicago (UIC) campus. Her presentation was titled “Benchmarking Income and Expenses for MOBs.”