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This will be the fourth and final installment of the ‘How to Find good Medical Office Buildings’ series. As a brief recap, we started out in week one by identifying the top metro market for Texas medical office buildings by comparing demographic demand characteristics and choosing the top market. In week two, we found ourselves looking at the Dallas / Fort Worth metro area because that was the result of our previous week’s efforts. We concluded week two by using additional demand parameters to identify the top cities in the DFW metroplex for medical office buildings. In week three we compared these top cities in DFW and identified Plano as the top suburb for medical office in DFW. Now we are in week four. This week we will disaggregate the City of Plano by medical office demand parameters in order to find the best submarket to start our search. With all of that said, let’s ‘Get this show on the road!’
The first thing we want to do is to get a good feel of Plano and its medical environment. The number one demand driver of medical office buildings are hospitals. The following map delineates the City of Plano and identifies the major hospital location within its boundaries.
You will note that there are 9 hospitals. I think that is a good amount of hospitals for 300,000+ population city. Let’s look at how Plano citizens spend for medical use. The following map shows the distribution of medical expenditures for the city. The green represents high medical expenditures and red represents lower expenditures.
You will note the higher medical expenditures in the zip codes of 75023, 75025 and 75093. For anyone familiar with the area, these are intuitive results. These zip codes are considered West Plano and that is where the higher income households reside. It is also interesting to see that the 75024 zip code is not considered a higher medical expenditure area. Only by understanding the data and the city would you know that the data is based on accumulative medical expenditures and this particular area of the city consists of a very high concentration of corporate headquarters, office complexes and class A office buildings. Due to that high concentration of office buildings, the population numbers are lower which will affect the total medical expenditures that this thematic is tracking. With all of that said, it could be argued that the 75024 zip code could be a potential top MOB submarket due to the two hospitals in the area and the high average per family medical spending. For this study, we will not consider it though.
As we review of the medical expenditures mapped with the local hospitals, we notice a few things about the 75093 zip code:
- It has both high medical expenditures and four hospitals contained within it.
- It neighbors two additional hospitals from the 75075 zip code.
- It has three major thoroughfares – Dallas North Tollway, Preston Road and the George Bush Tollway.
After additional research we also find that the 75093 zip code is our best bet based on comparing the percentage of mature population, median income, population size and population growth rate. The 75093 zip code is definitely the place to start looking within the City of Plano.
Now that we have identified a zip code, let’s break it down into zones so we can apply a laser to our search efforts. The following maps the common medical office building amenities within the 75093 zip code. It also shows four common cluster zones that are found when mapping the amenities. The amenities that you will be looking at are Restaurants, Assisted Living Centers, Banks and Grocery Stores.
As you review the cluster zone maps of the 75093 zip code. Do you see how the different amenities are clustering within those four zones? Are you also seeing how the two zones are containing the most amenities for this zip code? Okay now we have it. We have determined that cluster zone #1 and #4 should be our best starting points. At this point, we have identified our target area and we will transition to the supply side of things and ascertain the available inventory for the type of medical office building we want to buy. We won’t be spending time on that in this installment. It might be a future topic.
At this point, let’s summarize what we have done so far in the ‘How to Find good Medical Office Buildings’ series. We started out in week one by identifying the top metro market for Texas medical office buildings by comparing demographic demand characteristics and choosing the top market. In week two, we found ourselves looking at the Dallas / Fort Worth metro area because that was the result of our previous week’s efforts. We concluded week two by using additional demand parameters to identify the top cities in the DFW metroplex for medical office buildings. In week three we compared these top cities in DFW and identified Plano as the top suburb for medical office in DFW. This week we looked at the demand parameters within each zip code and narrowed down to one. Finally we looked for different cluster zones within the zip code and identified our most likely area for our ideal medical office building.
What a ride! I hope that you have enjoyed this and more importantly learned how to find medical office buildings. You can use this methodology for any state, any metro market and any city. If you would like to learn more about using demographic tools to identify real estate demand, ask me about my upcoming course on the subject. We will spend more time on this and more. Happy Deal Making!
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- How To Find a Good Medical Office Building ? Part III (laurexrealty.wordpress.com)
- How To Find a Good Medical Office Building ? Part II (laurexrealty.wordpress.com)
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