Leasing and purchase rates vary tremendously based on location, type of property and demographics. For example, in a Class A medical building adjacent to a hospital, lease rates can range anywhere from $20 per square foot to as high as $38 per square foot. In a medical building that is not on or near a hospital campus rents can be significantly less; a free-standing building or small medical building can offer more exposure and an opportunity to purchase but does not suit all practices.

One of the narrowest medical markets – the central perimeter, otherwise known as “Pill Hill” – occupancy on the hospital campuses are very high with estimated vacancy at only 7.7%. Rents range as high as $30 per square foot and as low as $12 per square foot. There are values available depending on your required services, desired location and your ability to be proactive about your mission. Any available properties near the hospital are on the high end of the price range; buildings further from the hospital campus and of lower quality are on the low price range. With Northside Hospital, St. Josephs Medical Center and Scottish Rite all expanding, there is a scarcity of land for needed growth. Be sure to be proactive if your intention is to move into this market. If you are interested in purchasing in “Pill Hill”, the search may be more difficult, but can be done. Small parcels of land, freestanding buildings and office condos are available. A finished medical office suite might be purchased within a range of $150 per foot to as high as $300 per foot depending on the finish and distance from the hospitals. One of the most recent sales, a smaller property on Roswell Road, was completed at just over $218 per square foot.

Looking around Wellstar Kennestone Hospital in Marietta, there are only four class A buildings in the market, including the new Whitcher Street building. Vacancy rates are estimated at 12%, which leaves very little class A space available, and the average rents are in excess of $22 per square foot. If you are targeting the class B/C market, the rents drop to a range of $16 to $20 per square foot with free parking. Some current availability for lease in this market includes one suite at 611 Campbell Hill estimated at 3,500 square feet and 335 Roselane St. with two suites available totaling 3,500. If you are looking to purchase or develop a building in the area, land costs are extremely high, but there are a few opportunities. One of the most recent sales in close proximity to the hospital is 796 Church Street, a vacant 7,238 square foot medical building in need of significant repair sold for $1,000,000.00: just over $138 per square foot. There are few available purchase options in the market, so you must be proactive to have a chance.

The Buckhead and Midtown areas are additional high demand locations due to the amount of medical services required and the density surrounding Piedmont and Crawford Long Hospitals. The lease rates vary dramatically depending on the type of building. There is limited class A medical space available on both campuses and lease rates vary. For example, adjacent to Crawford Long Hospital Cousins Properties Incorporated is currently leasing space in their 357,782 square feet building that was completed in 2002. The current occupancy is already over 90% and the rates are $18 plus all expenses (including taxes, insurance and maintenance), which can drive your total occupancy cost up significantly. When negotiating any lease, be sure to analyze your total occupancy cost so you are not surprised by your overhead later. Piedmont Hospital also has limited space available and is developing a new medical office building. The existing Sheffield I building currently has approximately 8,000 square feet available, and the rates range from $21.25 to $25 per square foot, including all expenses, depending on the size of the space and length of the lease. With an effective plan, you can find raw land for development, a free standing building or an office condo, depending on the needs of your practice.

We will continue to highlight Medical space in other Metro areas, including the Emory Johns Creek Hospital area, the area surrounding Northside Forsyth Hospital in Cumming and the Dekalb Medical Campuses, including Hillandale and Decatur. For more information on these or any other medical real estate markets, call us at (404) 477- 2044 or email info@MyHREA.com.