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.
This unassuming market is number 2 in terms of outpatient building deliveries and 4th for total deal volume. Even rent growth has been consistently surpassing the national average.
According to numerous professionals involved in healthcare real estate (HRE), large capital sources, including foreign investors, have a record amount of “dry powder” they are anxiously looking to invest in medical office buildings (MOBs).
All of this interest presents opportunities for experienced, well-known HRE development, management and investment firms that perhaps do not have unlimited funds to acquire properties. Such firms can tap into all of that available capital by forming joint venture (JV) partnerships with large investors to acquire and/or develop MOBs and, perhaps, other types of healthcare properties.
In general, health systems are choosing to build hospitals with lower bed counts. Technology, demand and reimbursement changes are all pressures that shift the focus to patient experience, advancing technology, and wellness and preventative medicine. This translates into more outpatient services, private rooms and fewer beds.
Following a record year for transactions when $16.6B worth of MOBs traded hands, overall volume is showing signs of moderating through the first 2 quarters of 2018.
One of the largest projects in the Revista database is about to open on June 24th after more than a decade of careful planning and execution.