August 28, 2019
John B. Mugford

MOB Q2 Sales Drop 29 Percent From a Year Ago…But Sales Still Have a Chance to Top $10 Billion in 2019

There’s plenty of talk in the medical office building (MOB) sales sector that even though demand remains as high as ever for the product type, the volume has been quiet so far in 2019.

Second quarter (Q2) and year-to-date MOB sales statistics compiled by healthcare real estate (HRE) data firm Revista, which provides a variety of HRE data to subscribers, confirm this notion.

According to Revista, MOB sales in Q2 totaled $2.9 billion, down 17 percent from a year earlier, in Q2 2018, when sales totaled $3.5 billion.

Coupled with the $1.7 billion of sales Revista tracked in Q1 2019, the first half of this year saw an MOB sales volume of $4.6 billion, down about 29 percent from the first half of 2018 when sales first-half were $6.5 billion.

“While the MOB sales volume is lower so far in 2019, the sector is on pace to record over $10 billion worth of sales for the full year of 2019,” said Revista Principal Mike Hargrave, noting that $10 billion has been a bench-mark figure for MOB volume during the current four- to five-year stretch run of strong MOB sales activity.

Hargrave notes that while sales have been slower so far in 2019 than recent years, one traditional MOB buyer type has made its presence known once again.

“The REITs (real estate investment trusts) have become more active in 2019, accounting for 42 percent of the buying activity year to date, which compares to just 18 percent in 2018. This should bode well for increased buying activity for the remainder of the year.”

REIT activity has certainly been fueled by Welltower Inc.’s (NYSE: WELL) $1.5 billion Q2 purchase of 55 MOBs from CNL Healthcare Properties.

Numerous MOB sales professionals have said there is a good chance for an uptick in volume in the second half of 2019, with several portfolio deals potentially closing. They add that because investor demand remains so strong — keeping pricing high and capitalization (cap) rates, or first-year returns — low, MOB owners are likely to put some of their facilities on the market.

John B. Mugford is the editor of Healthcare Real Estate Insights. For more information on HREI – please visit