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.
