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.
DuPage Medical Group (DMG), of Downers Grove, Illinois (www.dupagemedicalgroup.com) has recently sold a group of trophy MOBs to Harrison Street Realty Capital (HSRE).
As the start of higher interest rates have entered into 2018 economic data, Medical Office REIT share prices have pulled back implying their portfolio values have also fallen...
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.
These new reports detail transaction activity for 3 types of investors – Real Estate Investment Trusts (REITs), Hospitals and Health Systems and Private Investors. Each of the 3 reports provides detail on volume trends, pricing, share data, as well as data for the most active investors and metro areas.
Here are the top 5 markets. The most active market during this time has been LA/Orange County which has seen $2.9B worth of MOB transaction volumes. LA/Orange also has the lowest cap rate/yield at 5.7%.
Revista has posted its 2017 Year End Transactions Reports for subscribers to its data service. By most accounts, 2017 was a record year for the sector in terms of transaction volume. Overall $21.8B worth of hospital and medical office real estate traded hands in 2017.
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?
Transaction volumes have been steadily rising for the past few years. Revista began tracking property transactions in 2014 and volumes in that year were $8.9B for MOBs