Classic economic theories establish a clear relationship between supply and demand for many goods and services. In real estate circles the theory says that as prices rise, demand (or occupancy) should fall.
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.
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.
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?
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.
In recent weeks we've seen significant volatility in the stock market along with increasing fears of a recession. After all, this is now the longest market expansion in history. It can't continue forever, right? MOBs have long been considered somewhat insulated from market shifts - but what does the data say?
Supply/demand and Rent trends will begin appearing in Revista’s products which will enable subscribers to better analyze macro market risks and opportunities.
2019 MOB deal volume continues the cooling trend after coming off historical highs in 2017. While total volume may be down, a theme continues - private investors represent the greatest percentage of acquisitions.
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.