With the economy still in disarray, interest rates are still low and overextended developers are selling land and building space at greatly reduced rates. There has actually been a boom in medical office building construction, while other sectors continue to wane. If you are thinking of expanding your medical practice, now might be a good time.

Take advantage of today’s low costs while considering the near future, when health system reform will be fully implemented, bringing in millions more patients who are currently uninsured and baby boomers who will need more care.

“Business-smart physicians are looking to the future,” said Thomas Adams, president and CEO of Florida Medical Space, which specializes in health care real estate. “They may only be in practice for another 10 to 15 years, but the real estate they own will set them up financially much longer.”

Experts are also predicting a need for additional or renovated medical office space, to facilitate the use of electronic medical records and because of increased pressure from insurers to change more procedures to outpatient status, increasing demand for private practices.

In a 2010 Medical Office Report prepared for Marcus & Millichap, a national real estate brokerage firm, senior analyst Thomas Hershey estimated that nearly 45 million more square feet of medical office building space will be needed if 50% of the 46 million uninsured individuals attain coverage through health system reform. The report also stated that an additional 25 million square feet of medical office space would be needed by the end of 2013 to accommodate the population growth in the 55-and-up age group.

Of course, there are a few things to consider before jumping onto the expansion bandwagon. Is your practice already successful? Will it benefit from health reform and senior care? Do you have a sound business plan, solid insurer contracts, some business savvy and enough capital to make your practice attractive to banks?

If you feel the time is right to build, renovate or expand, here are some tips to make it easier, more successful and less expensive:
• Location, location, location. A cheap vacant building won’t be worth the money if it isn’t in a good spot. Look for one in a visible, easily accessible area, preferably close to a hospital.
• Have sufficient capital. You need to look financially stable when you go to the bank for a loan. Having that strength means you can ask for, and get, a good rate.
• Present a good business plan. If nobody in your practice has a lot of business savvy, hire someone who can crunch the numbers and make a compelling presentation out of your data. The banks need to see that you know what you’re talking about.
• Seek out incentives. In some communities, you can get tax incentives for development, especially if you operate in areas targeted for growth or with a high number of vacancies.

And, of course, if you need additional personnel to support your expansion, you know where to turn! Contact Morgan Hunter Health Search whenever you need leadership solutions for your healthcare practice.