Concrete investment: Having a space of your own

If your lease is up or your practice has grown too big for your space, it may be time to think about buying or building. In today's economic climate, some physicians are eyeing their office buildings as investments.

By Mike Norbut, AMNews staff. Jan. 6, 2003.

The need for more space is a problem many physicians face, but for Geoffrey Bisignani, MD, the solution was created out of thin air.

Dr. Bisignani, a urologist, is planning to build a new medical office building in Greensburg, Pa., outside Pittsburgh, with his brother, Gregory Bisignani, MD, an orthopedic surgeon, and Mark Klingensmith, MD, an otolaryngologist. The building idea started with the latter two doctors, who originally planned a two-story building. But when the urologist said he was interested, they expanded their plans to add a third floor to the design.

While he realized it's a risky investment in an uncertain economic time for physicians, Dr. Geoffrey Bisignani considered buying while interest rates are low to be a better option than renting.

"Really, we need space, so you might as well design your own," he said. "We plan to be there for a while. If we break even we'll be lucky, but [regardless,] we will have equity in the building."

Ultimately, the decision to buy is a personal one, based on a doctor's financial situation and view of the future. It can be risky and costly, but with the stock market toiling and rents always in danger of going up, some doctors have turned to their office buildings as concrete investments.

"Physicians have shown more interest in owning real estate than in the past," said Gordon Soderlund, vice president and investment officer for GE Capital Healthcare Financial Services in Chicago. "They do it for economic reasons, and it's an ego thing. They want their space to be a space of presence."