Small businesses, including physician offices, are the new targets for real estate investors, according to The Wall Street Journal.
Property investors traditionally steered clear of properties housing small businesses because they are riskier; it's more likely small businesses than big chains will shut down or stop paying rent, according to the Journal.
But a new breed of investors are seeing big opportunities in buying up single-tenant properties where tenants agree to share more information with landlords and prices are typically lower. Keyway, a New York City-based firm, is focused on buying medical office buildings and leasing them back to physicians, which have a lower risk of vacancy than restaurants or retail stores, according to the report.
Keyway has bought around $50 million worth of properties since its founding in 2020 and is in talks to spend another $200 million.
Montecito Medical Real Estate has also built a strategy around acquiring medical office space, with recent transactions including a $12 million building in Chesterfield, Va., and a $21 million building in Virginia Beach, Va., housing both an orthopedic and gastroenterology practice.