August 30, 2015
Mike Hargrave

Hospital Real Estate Yields Compress Through the First Half of 2015

Revista has recently released mid-year 2015 transactions reports. A national report is available for purchase while subscribers have additional access to the top 50 metros report. Each report is roughly 7 pages, in PDF format, and provides a thorough overview of medical office (MOB) and hospital transaction activity.

One of the insights from the report is that hospital yields have compressed through 2015. The hospital yield reported in the mid-year transactions report include real estate trades of general acute care hospitals, acute rehabilitation hospitals and long term acute care hospitals. Yields among these hospital transactions had been trending between 7.3% and 8% throughout 2014. In 2015, however, yields have compressed to 7.3% in 1Q15 and to 6.7% in 2Q15 (see chart below). The 6.7% average yield in 2Q15 is on volume of over $422 Million. The compression in yields has also followed medical office trends. For more information on that, please consult the 2015 mid-year transactions report.   Will these trends continue? Find out at the 2015 Revista Medical Real Estate Investment Forum.

Hospital Real Estate Trends.  Source:  Revista

Hospital Trend