- The Columbia, SC medical office market continues to perform extremely well as medical practices and hospitals rapidly expand. As of mid-year 2002, the market consists of approximately 1.1 million square feet of Medical Office Building (MOB) space. During 2001 and 2002, there has been considerable real estate activity in the medical community. MOBs continue to lease space to new physician practices as well as the established practices which are expanding into multiple locations.
- Additionally, numerous physician practices have purchased property and are constructing medical facilities, which they will own.
- As of mid-year 2002, the overall occupancy of the MOBs was 92.5%. This occupancy has increased dramatically from 84.4% at year-end 2001. Physician practice groups have also shown a preference to own freestanding facilities in close proximity to hospitals or centrally located between hospitals. This factor may have an impact on the occupancy of hospital owned MOBs in Columbia in coming years.
- The medical office market in Columbia is predominantly controlled by the four 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 increased during 2001 but have remained stable during the first half of 2002. Rates are expected to increase slightly during the next twelve months as very little new lease activity is generated due to high occupancy levels. Average rental rates will remain stable for the second half of 2002 but will begin to escalate in 2003. Occupancy rates will remain very stable over the next twelve-month period.
- Palmetto Health Alliance began construction of its new Northwest Campus in July 2002. This will dramatically change the northwest market, as numerous physician practices may desire to be located in close proximity to the new ambulatory care facility.
- The forecast for the medical office market in Columbia for the remainder of 2002 is mixed. The market will continue to experience rapid and substantial growth of medical facilities. Much of this growth will come by physicians who may construct their own facilities rather than the development of new, multi-tenant MOBs.
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