Why the Condition of Your Medical Practice Matters
If you’re considering opening a new medical practice facility, you’ll be faced with the choice of whether to repurpose an existing building or build a new one from the ground up.
Both use cases have their advantages and disadvantages and there are several factors to carefully consider before you choose. We spoke with our Developers, Cole Smith and Jack Guerkink, as well as Asset Manager Tandell Veleker to find out what they think physicians, dentists, and veterinarians should consider before deciding which type of facility they should move forward with.
One of the distinct advantages of new buildings is the positive effect they have on your patient’s perception of your practice. When a patient steps into a new, clean, and tailored environment it creates an expectation that the medical care that follows will carry the same degree of thought and professionalism.
While the renovation of an existing building can create a similar effect, it does limit the possibilities to create a care environment built to your and your patients’ specific needs.
“One of the biggest questions I ask doctors is ‘Does the look and appeal of your building match the quality of care you are providing?” says Jack.
And it’s not just the inside of a new facility that creates a positive effect, the construction of a new building can create hype in the neighborhood you’ll be practicing. Think of it as a built-in promotion for your new practice. We’ve all asked a family member a question similar to, “Hey, did you see they’re building something on 3rd Street?”
For those practices that take on new patients or rely on word-of-mouth, that sort of free advertising is invaluable.
“If your practice benefits by visibility,” explains Cole. “Then occupying more aesthetically pleasing space increases your odds of growing your patient base. People begin to look past older buildings because they’ve seen them forever.”
Renovating or buying an existing building may make sense for those that are hoping to find new space in the near future or are vulnerable to short-term risk, but a new building is a better investment for those that are hoping to plant long-term roots.
“When thinking about new space or 2nd generation take into consideration your practice’s timeframe and growth rate,” advises Cole. “If a practice has 20 more years to be in operation then occupying new space now will get you much further than space that is already on the decline.”
“Much like an older home, aging construction calls for more frequent maintenance,” says Tandell. “A new build comes with the assurance of not only a builder’s warranty but also a warranty attached to the equipment and materials to ensure the longevity of the systems in place.”
Other possibilities open up when building your own facility such as creating a retail-oriented building with an opportunity for additional tenants that complement your business. This can contribute to the overall success and longevity of your business by attracting more visitors, generating visibility, and adding another income stream for your practice.
Building the Practice You Want
“When it comes to renovating a building you just need to be more flexible with your vision because you will likely have to sacrifice something,” explains Jack.
While new construction may require a heavier upfront time and money investment than buying a building and renovating, it allows practitioners to create their ideal work environment, rather than trying to fit a square peg into a round hole.
“Renovated buildings tend to have more unused space as they were not intentionally designed for the use,” continues Jack. “That means paying for more square feet than you need.”
It can be an awkward experience for patients to find themselves in a repurposed building, as well as the doctors, veterinarians, or dentists working in the space. In a highly competitive market, that could be the difference between a returning customer and a one-time visitor, or even retaining talent.
“Renovated or repurposed buildings tend to have issues with operational efficiencies for doctors and staff and those can oftentimes be felt by patients,” advises Jack.
A new building can be designed to certain specifications, and allow room for measured and thoughtful growth. At Ashton Gray, we recently helped a surgical center build a brand new facility that allowed them to expand today and leave room for the future.
“If you’re building new construction, one can strategize their phases of development to allow for continued expansion within one site,” explains Cole. “2nd generation property can be more limiting to growth due to property lines and neighboring properties.”
Car Building Scent
There’s something appealing about owning an asset when you know its entire history. You won’t have to worry about troublesome surprises such as mold from leaks or hazardous materials like asbestos. You’ll also know the bones of your building like the plumbing and electricity are solid.
“Modernization has a significant cost impact – this can be anything from replacing windows to elevator modernization or even floor replacement,” says Tandell. “Paying upfront for a new modern and efficient building prolongs the need for these updates and upgrades. – Save that for the next generation.”
“Water and electric are major variables for providing healthcare,” explains Cole. “2nd generation space will be more susceptible to problems down the road. New construction provides more reliable plumbing and water. Older buildings are less likely to have a reliable infrastructure.
Each practice is in a different stage of maturity, with different short-term or long-term goals in mind. For some, buying an existing building may be the most prudent decision, but for those looking to maximize their growth and earnings potential, new construction is often the wisest choice.
At Ashton Gray, we’ve worked alongside doctors, dentists, veterinarians, and investors to make their next medical business venture a reality. Want to discuss how Ashton Gray’s model can work for you? Let’s talk.