While general office has faced headwinds, medical office has attracted steady investor interest. Healthcare demand, specialized build-outs and long-term tenants make medical office buildings (MOBs) attractive. Here's what to know about medical office investment in Indiana.
Why investors like medical office
• Demand drivers: an aging population and growing suburbs increase healthcare needs
• Sticky tenants: practices invest heavily in their spaces and rarely move
• Patient convenience: outpatient care continues shifting from hospitals to community locations
• Health system affiliations: some tenants are backed by large systems
• Less exposure to hybrid work than traditional office
Types of medical office
• On-campus or adjacent buildings near hospitals
• Off-campus community buildings in growing suburbs
• Single-tenant clinics leased to a practice or health system
• Multi-tenant MOBs with a mix of specialties
• Medical office condos owned by practices
Risks to evaluate
• Specialized improvements: costly to re-lease if a tenant leaves
• Tenant concentration: reliance on one practice or system
• Healthcare consolidation: practices merging or relocating
• Reimbursement changes affecting practice finances
• Higher operating costs: more HVAC, plumbing and parking needs
What to analyze
• Tenant credit and affiliations
• Lease terms and renewal history
• Proximity to hospitals and population growth
• Parking ratios and accessibility
• Building systems and medical infrastructure
• Zoning that allows medical uses
Central Indiana context
Central Indiana's population growth, especially in Hamilton, Boone, Hendricks and Johnson counties, supports demand for community medical office. Major health systems operate hospitals and outpatient facilities across the region.
An example of a medical office investment
An investor purchased a 12,000-square-foot multi-tenant medical office building in a growing suburb north of Indianapolis, leased to a dental practice, a physical therapy clinic and a family medicine group.
Long leases and specialized build-outs supported strong renewal rates, and the investor improved returns by leasing a small vacancy to a specialty practice.
Lease terms common in medical office
Medical office leases often differ from general office leases:
• Longer terms, frequently ten years or more
• Larger improvement allowances for specialized build-outs
• Exclusive-use clauses protecting specialties
• Net lease structures where practices pay operating costs
• Assignment provisions for practice sales or health system affiliations
• After-hours access and HVAC for extended clinic hours
Investors should review these terms closely, since they affect both income stability and re-leasing costs.
Evaluating location for medical office
The best medical office investments sit where patients are: near growing neighborhoods, major roads and hospitals, with easy parking and visible signage. In Central Indiana, communities with strong population growth — such as Fishers, Westfield, Noblesville, Zionsville, Whitestown, Greenwood and Avon — have attracted outpatient development. Strong locations support renewals and make re-leasing easier if a practice leaves, strengthening any medical office investment in Indiana.
Frequently asked questions
Why is medical office considered resilient? Healthcare demand and sticky tenants.
Is medical office riskier to re-lease? It can be costly due to specialized improvements.
Do health systems lease medical office? Yes, many lease or own outpatient facilities.
Explore medical office investments
I help investors and practices evaluate medical office opportunities across Central Indiana.
Annie Scott — Annie Scott Realty Group LLC / F.C. Tucker Company Cell: (317) 902-8622 ·
