Last year 77 medical office projects started that will be over 100,000 square feet when completed. That's quite an uptick over previous years when we averaged less than 50.
The MOB Scene
December 17, 2019 Mike Hargrave
Single Property MOB Cap Rates Creeping Up
Overall, MOB cap rates have continued to remain at lower levels compared to just a few years ago. According to Revista’s 3rd Quarter, 2019 Medical Real Estate Transactions Report, the US MOB average cap rate 6.4% which was down slightly from 6.5% in 3Q18.
If you have seen Revista’s metro trends you may have noticed the Baltimore MOB market is one of the tightest in the country. The MOB occupancy rate has averaged between 93.9% and 94.8% since the 2nd quarter of 2018.
So much of the conversation in the industry right now is about placing medical services out into the community to be more convenient and cost effective for patients. But what is that community going to look like in 10 years? 20 years? Flexibility becomes the name of the game.
Let’s take a look at the Jacksonville market. At 7.7 million square feet (MSF), Jacksonville’s MOB market is the 36th largest market in the US based on total SF.
After a slow start to the year, medical office building (MOB) sales have picked up in the second and third quarters (Q2 and Q3), providing a very strong possibility that the final 2019 volume will top $10 billion for the fifth straight year.
It doesn’t look as if anyone is going to dethrone Oakland, Calif.-based Kaiser Permanente as the country’s largest owner of medical real estate anytime soon.
For the sixth consecutive year, Kaiser, a health insurer and provider with 8.6 million members in nine states, sat atop the annual “2018 Top 50 Owners of Medical Real Estate” report compiled by Revista, which gathers and provides a wide variety of healthcare real estate (HRE) data, statistics and reports for its subscribing members.
Taken together, the Hospital and MOB sector is valued at $1 Trillion
There are currently about 600 medical office projects under way across the country. More than 15 percent of those projects include orthopedics. Why do so many projects include this specialty?
Revista is thrilled to announce that Andrew Haslam, Chief Asset Officer for Providence St. Joseph’s Health System and Tom Errath, Director for Harrison Street Real Estate Capital will co-chair the 2020 Revista Medical Real Estate Investment Forum.
The country’s healthcare-focused REITs have always been, and are likely to continue to be, an important investor group in the medical office building (MOB) acquisitions sector.
While MOB transaction activity might have cooled somewhat and MOB construction remains steady, deliveries of hospital projects have been on a spike. Based on projects that have either opened or are scheduled to open by the end of the year, we will be adding roughly 35 million square feet to inventory in 2019.
There’s plenty of talk in the medical office building (MOB) sales sector that even though demand remains as high as ever for the product type, the volume has been quiet so far in 2019. Second quarter (Q2) and year-to-date MOB sales statistics compiled by healthcare real estate (HRE) data firm Revista, which provides a variety of HRE data to subscribers, confirm this notion.
The Revista MOB Sector Fundamentals Report represents approximately 150M SF of data reported by major owners of medical office properties. Data are provided quarterly encompassing a portfolio as well as on a same store, year over year basis.
Revista and its industry advisory board are happy to announce the sessions for the upcoming 2018 Medical Real Estate Investment Forum, January 29-30, 2018. We work diligently to cover topics that matter most to our industry in an efficient timeframe. We think you'll agree these will be fantastic, data-packed sessions:
The biggest medical office building (MOB) deal of 2017 so far could have more of an impact on the healthcare real estate (HRE) sector than just making headlines.
Office-Meds can often present challenges for healthcare practices such as parking and access, among others. As such, the ratio of Office-Meds to MOBs can be an important stat to monitor market by market
By Mindy Berman, Managing Director at JLL - U.S. seniors housing has been a magnet for global capital with $3.4 billion in investments in the last 10 years, most in the last five years. Canada leads the pack with 40% of the total investment activity, followed closely by Asia-Pacific at 35%.
Combined with off peak total transaction volume, the numbers seem to reflect what a lot of us are feeling - a very competitive market with more interested buyers than there are opportunities.