Special Report: Are there distressed med properties?


By John Mugford

Eric Fischer of Trammell Crow and Al Pontius of Marcus & Millichap
Photo courtesy of BOMA International

Today’s economic environment is placing plenty of financial pressure on the owners of commercial properties, including some who own medical office buildings (MOBs). But this pressure has not necessarily led to many distressed properties in the MOB sector.

Even so, the recession and tight capital markets have prompted some “interesting” circumstances for owners, which could provide investors with some uncommon opportunities – although the assets involved might not quite meet the textbook definition of “distressed” properties.

These were a few of the observations of a panel of healthcare real estate veterans during a presentation at the 2009 Medical Office Buildings (MOBs) and Healthcare Facilities Conference in late June in Philadelphia.

The event was presented by BOMA International and included a series of presentations, panel discussions and other events at the Philadelphia Marriott Downtown. The panel discussion highlighted in this article was titled, “Market Opportunities? Getting Healthy Returns for Distressed Assets.”

Not ‘distressed,’ but…

A distressed property is generally defined as real estate that is under foreclosure or impending foreclosure because of insufficient income production. The owners of distressed properties are often forced to sell the assets at prices that are below market value, and therein lies the potential opportunity for investors.

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