Residential Conversions to Medical Offices Can Prove to Be Challenging
The price attraction to residential properties in foreclosure has received the interest of many investors including health- care professionals recently as these properties can be bought at bargain prices. This article attempts to point out several of the challenges that have to be eliminated should this be a desire of the healthcare professional.
The first challenge is zoning. Although unlikely, it is possible to find a foreclosed residential property that is zoned for commercial office and if so, expect to pay more. In most cases, residential housing is not zoned commercial. In the process of rezoning the property to commercial, expect to spend time and money. The costs associated with rezoning, include paying for a zoning attorney, surveys, and land usage plans used to communicate with the zoning authority. The time-frame to rezone a piece of property may take as lit- tle as ninety (90) days or more than two (2) years. The variance in time depends on the property location, neighborhood, and zoning authority. In some cases, residential property may not be able to be rezoned due to an overlay master plan of the surrounding county or city. It is strongly recommended to do a complete due diligence in regard to zoning before closing on the property to avoid any rezoning issues that may come up.
Once the property is rezoned for the new medical office, the second challenge is working to meet require- ments to provide public access and parking, along with required handicap access. Medical offices should provide parking at a rate of five (5) parking places per one thousand (1,000) square feet of facility. For example, a four thousand (4,000) square foot facility requires twenty (20) parking places to be provided. When parking is added this increases impervious surfaces of the land and the governing authority will require a hydrology study to be conducted before issuing a land disturbance permit. This study is performed by a civil engineer who is hired to calculate the new rain water run-off caused by the additional hard sur- face parking. Typically when impervious surface is added to property, the need to retain water on the property is required and the water leaving the property must be cleaner than it came. This is accomplished by using flush ponds, sediment traps, or large filters. These devices are added to ensure trash is kept on the property, and makes the owner responsible for maintaining the water run-off system.
Mentioned earlier, handicap access to the property, in the parking lot, and into the building needs to be studied. This can be accomplished by hiring an architect or civil engineer. Typically, residential prop- erties are not designed with handicap access in mind. Depending on the property, this could be a difficult challenge to overcome, due to the requirements of ramp access, markings and special entry door.
After the site is addressed, the third challenge is converting the interior of the property to space usable for offices. Typical residential construction uses sepa- ration walls as structural supports for the house. It may become a challenge to dis- tribute the structural load should walls be relocated. Also, interior walls in a home are not insulated for sound transmission so conversation can easily be heard between spaces. Again, plans need to be made for handicap access in the building, especially for restrooms and hallways.
Finally, fire exists from the property need to be reviewed to see if the exit plan meets the fire code. This may require the addition of fire-rated corridors and exits. This can be accomplished with the use of a professional architect as your consultant.
All of the above and other issues need to be addressed when considering the pur- chase of a residential property to convert to medical office space. Teaming up with the right group of professionals to investi- gate and provide the potential buyer with a cost budget for renovation is highly rec- ommended before the sale of the property is closed.
Eric Schoppman, President of Schoppman Company, Inc., can be reached at (770) 693-9000 or visit http://www.schoppman.com.
This article was originally published June 2009 edition of Atlanta Hospital News.