Demand for Medical Office Space is Up Amid Lingering Effects of the Pandemic – Chicago Business Journal
As medical systems struggled to manage the coronavirus crisis at the height of the pandemic, many facilities canceled or postponed elective surgeries, creating a backlog of procedures. And as patients reschedule those procedures, many are now opting not to have them done at hospitals.
The result has been rising demand for medical office buildings (MOBs) that industry experts say will continue this year.
MOBs are finding locations in standalone buildings that average 60,000 square feet, said Perry Higa, executive vice president at NAI Hiffman.
“A lot of [Chicago-area] MOBs can be found in suburban areas like Schaumburg, Buffalo Grove and Kildeer,” he told the Chicago Business Journal. “Two reasons why suburban locations are being chosen by developers is because there’s more land available and because of [their] baby boom population. There are MOBs in Chicago too, but most of those buildings are built vertically because there’s not as much land available in the city as the suburbs.”
Higa added that there’s a population shift in Chicago as millennials start to move to the suburbs from downtown.
“There are many senior care facilities, such as assisted living and memory care, located in the suburbs too,” he said.
Chicago-area health care providers Silver Cross Hospital and Premier Suburban Medical Group broke ground last year on a $25 million, 42,000-square-foot MOB (pictured below) after acquiring nearly 11 acres in Orland Park from St. Louis, Missouri-based SSM Health for $3.8 million.
With interest rates expected to increase again this year, Higa said the strength of the economy moving forward will determine if more new construction will take place this year.
“You will see growth in the health care field as MOB users want to be located closer to their patients and in highly populated neighborhoods,” said Higa.