What is the typical lease duration for healthcare properties?

The typical lease duration for healthcare properties is often 15 years or more due to several factors inherent to the healthcare sector. Healthcare facilities require significant capital investment in specialized equipment and infrastructure, which justifies longer lease terms to ensure the return on investment for both landlords and tenants. Longer leases provide stability and predictability for healthcare providers, allowing them to plan for patient care without the disruption of frequent relocations. This extended duration is also seen as attractive to investors and property owners, as it reduces vacancy risk and aligns with the longer-term operational needs of medical practices and hospitals.

In general, shorter lease durations, such as those around 5 years or less, are more typical in other commercial sectors like retail or office leasing but are not suited to the long-term requirements of healthcare. While 10-year leases can occasionally be seen, they are less common in healthcare because they do not provide the same level of security for both tenants and landlords. The option for 20 years, along with renewal options, emphasizes the trend towards stability and long-term relationships in the healthcare real estate market.