- The Columbia, SC medical office market continues to perform very well given the rapid advances in the medical community. As of year end 2001, the market consists of approximately 1.2 million square feet of Medical Office Building (MOB) space. During 2001, there has been a considerable amount of real estate activity in the medical community. MOBs continue to lease space to new physician practices as well as physician practices which are establishing multiple locations. Additionally, numerous physician practices have purchased property and are constructing medical facilities which they will own.
- As of year end 2001, the overall occupancy of the MOBs was 84.4%. This occupancy is down slightly from 85.1% at mid-year 2001. Physician practice groups have shown a preference to own free-standing facilities in close proximity to hospitals or centrally located between hospitals. This factor may begin to have a negative impact on the occupancy of MOBs in Columbia in the near future.
- The medical office market in Columbia is predominantly controlled by the five major hospitals operating within the metropolitan area. The hospitals include Lexington Medical Center, Providence Hospital and the Palmetto Health Alliance which is comprised of Palmetto Baptist Medical Center and Palmetto Richland Memorial Hospital.
- Average rental rates for medical office space have increased slightly during 2001 as they did during the prior year. Medical space which has recently been constructed with higher quality finishes, better amenities and more efficiencies is being leased at rates higher than older existing MOB space. The average rental rate for medical office space in Columbia stands at $18.57 per square foot, an increase of $0.12 per square foot since mid-year 2001. Rates are expected to continue to increase further due to the limited amount of quality medical office space within certain markets coupled with the increasing costs of physician tenant improvements and increasing building operating costs.
- The forecast for the medical office market in Columbia for 2002 is mixed. The market will continue to experience rapid and substantial growth of medical facilities, however, much of this growth will come by physicians who may construct their own facilities rather than the development of new, multi-tenant MOBs.
- Additionally, Palmetto Health Alliance Northwest Hospital will begin construction in 2002. This will dramatically change the northwest market as numerous physician practices will desire to be located in close proximity to the new hospital facility.
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