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.
There’s a widespread notion that opportunities to open new urgent care centers (UCCs) in the United States have, for the most part, run their course.
The main culprits, it would seem, have been an over-saturation of such facilities in affluent suburban and Sunbelt markets and a somewhat restrictive payment model that left many patients with higher co-pays than typical doctor visits.
In the past twelve months, over 21 million square feet of medical office space have been delivered across the country. More than 35% of that has been condensed in 10 markets.
Deal reinforces strategy of creating value by packaging MOBs into large portfolios
With MOB sales off to a somewhat slow start in early 2019, the closing of the sector’s second-biggest arm’s length deal of all time is sure to bolster the volume for the year.
On May 15, Toledo, Ohio-based Welltower Inc. (NYSE: WELL), which has invested more than $6 billion in a variety of healthcare asset types since coming off the sidelines in early to mid-2018, reported that it closed on its previously announced $1.25 billion acquisition of 55 MOBs from Orlando, Fla.-based CNL Healthcare Properties, a non-traded healthcare real estate investment trust (REIT).
Medical Office Building (MOB) capitalization rates are trending up from their lows set in late 2017 and early 2018. The average cap rate for MOBs was 6.7% in the 1st quarter of 2019..
Although 22nd in rank for population, Charlotte is one of the fastest growing cities in the nation. Over the past 10 years the population has grown almost 60%! In 2010 the population rank was only 33… Affordable housing and lower cost of living paired with rapid economic growth and a hot job market has generated a population magnet.
The year 2018 proved to be healthy one for new medical office building (MOB) construction projects, which is certainly music to the ears of professionals involved in the healthcare real estate sector.
The good news comes by way of the third annual Outpatient Healthcare Real Estate (HRE) Development Report released late last week by Revista, a research firm that compiles data for the HRE sector, in conjunction with Healthcare Real Estate Insights (HREI), which provides news and trends in healthcare facility development, financing and investment.