Secondary and tertiary markets continue to see attention from healthcare groups. They are prioritizing proximity to residential, especially single-family homes. Services in these areas are lacking as small submarkets turn into major towns and cities, creating an opportunity for healthcare groups.
Healthcare groups now hold a similar market to retail tenants, with a focus on proximity to residential for serving their target demographic. What positive impacts will this have?
- Most importantly, the small markets are being receiving services they previously did not have access to.
- More services provided to an area allows for the totality of the market to improve. Families can now relocate to a new area because services they need or covet are now available.
- Expansion means more jobs. New doctors, nurses, and staff enter the workforce every year, and with new openings comes more opportunity. Small markets also have a lower cost of living, allowing for an easier barrier to entry for employees.
- From a real estate perspective, healthcare is one of the highest-valued property types in the country. High-quality healthcare tenants in a market give the entire area an increase in value and credibility, paving the path for more opportunity in other businesses.
South Puget Sound 3Q24 Insights
| Total SF | 8,797,730 |
| Vacancy | 3.46% |
| Vacant SF | 304,453 |
| Average Class A Asking Rent PSF NNN | $32.00 |
| Average Class B Asking Rent PSF NNN | $23.00 |
| Average Months to Lease | 6-9 Months |
| Average Market Sale Price PSF | $290.00 PSF |
| Average Market Cap Rate | 6.75% |
| Average Months to Sale | 3 – 6 Months |
The information in this update was composed by the Kidder Mathews healthcare and office brokerage team of Will Frame and Drew Frame.
Data source: CoStar
About the Frame Team
As members of the Kidder Mathews Healthcare and Office groups, Will Frame and Drew Frame are experts in healthcare and office services, specializing in landlord and tenant representation, as well as sales, including investment and owner/user. The team has completed over $300,000,000 in sales in the last 36 months and actively represent more than 3 million square feet of property. For more information, visit kmteamframe.com.
About Kidder Mathews
Kidder Mathews is the largest fully independent commercial real estate firm in the Western U.S., with over 900 professionals in 19 offices across Washington, Oregon, California, Idaho, Nevada, and Arizona. We offer a complete range of brokerage, appraisal, asset services, consulting, and debt & equity finance services for all property types. Kidder Mathews averages over $10 billion in transaction volume, manages more than 57 million square feet of space, and conducts 2,600 appraisal, consulting, and cost segregation assignments annually. For more information, visit kidder.com.
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Contact
Will Frame, Executive Vice President
Drew Frame, Senior Vice President
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