As REITs pull back on acquisitions and focus more on refining their portfolios, private equity groups have more than taken up the slack. Total healthcare real estate transaction volume may have cooled ever so slightly - but not much - and so far this year, private investor buyers are making up 76% of that total.

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.

The bread-and-butter medical office building (MOB) deal continues to entail the sale of a single building for a price of less $20 million, often quite a bit less. Such deals, of course, do not typically satisfy the appetites of the sector’s largest investors, including private equity funds, the larger publicly traded REITs, and institutions, as well as foreign capital. Such investors prefer deals that provide immediate scale instead of having to accumulate a portfolio by making smaller, one-building acquisitions.

Houston is the number one metro in terms of square feet of hospital space under construction. As of the end of 2017, Houston had roughly 4.2 million square feet of hospital space under way – about a million square feet ahead of the runner up, New York.

Prior to the start of 2018, several members of the Editorial Advisory Board (EAB) of Healthcare Real Estate Insights™ predicted that the sector would see some transactions in which health systems would buy medical office buildings (MOBs) that they are leasing from third-party owners.

Continuing focus on high medical office sales activity might lead one to wonder where all this activity is occurring. In 2017, more than 25% of sales volume was represented in only 5 metro areas. Who's leading the pack?

Doctor visits will increase 217.6% faster than the population in Los Angeles, Orange, Riverside, San Bernardino, and San Diego Counties. That’s according to an analysis prepared for the California Hospital, Outpatient Facilities & Medical Office Building Summit in Downtown Los Angeles on December 13.

...although roughly 25% of inventory is investor owned nationally, the stats vary widely by metro. Some areas are predominantly owned by healthcare providers while other areas have a significant portion, sometimes majority, of the real estate owned by a third party - whether that be a REIT, institutional fund or private investor.

Revista has posted the Mid -2017 Top 50 Metro Rankings Report for Medical Real Estate to its subscriber portal.

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.