How Will A New Hospital Affect Property Values?

July 24, 2017

What happens to nearby property values when a new hospital is built? Usually the surrounding area feels a ripple effect. Land values increase. Developers are quick to provide new space for offices and stores. The biggest profits are realized by the investors who get involved early (during the planning stages) before or while the hospital is built.

How It Happens

In one location in the Southeast, as a new hospital went up, the area around it began to pop its economic seams. Among the new activities that created an abnormal demand on land located near the hospital were:

• Physicians offices.
• Walk-in clinics.
• Medical supply companies
• Banks and investment advisors.
• Residential apartments for hospital employees.
• Fast food outlets.
• Auto repair shops and gas stations.
• Insurance Offices

A few decades ago when doctors regularly made house calls, hospitals were isolated structures and viewed as "places to rest". Now, however, doctors prefer to locate their offices near the hospital. The whole area begins to boom with ancillary services that are both directly and indirectly related to health.

There is often a need to expand the medical facilities at existing hospitals to handle a growing population and larger numbers of senior citizens. Land prices can soar when the hospital decides to buy nearby land for expansion. Watch for it, the alert investor can again have an opportunity for profits.