Are MOB fundamentals at Peak Plateau?
Revista has posted the Mid -2017 Top 50 Metro Rankings Report for Medical Real Estate to its subscriber portal. Revista partners and Revista full national access subscribers Revista can access through “my Revista” page located at http://www.revistamed.com/user/myaccount. 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.
Overall, the sector is performing near cyclical highs in terms of occupancy and NOI growth. However, there are signs emerging the fundamentals may be plateauing at these peak levels. The graph below shows evidence of this. Occupancy is essentially flat among this group (registered 92.3% in 2Q). And while revenue growth is a comparatively robust 2.7%, and NOI growth is 3.0%, expense growth is also at its highest growth level in years at 2.7%.
While it is too early to tell if fundamentals are plateauing, these metrics are indicative of such a phase.