JLL research reports that medical office sales in 2016 were $7.64 billion, the second highest year on record, following the breakout year of 2015 with $9.03 billion in sale volume.
- Sales of medical office buildings and outpatient care facilities exceeded all prior years except for 2015, providing solid support to the thesis that healthcare investment has gained acceptance amongst mainstream investors and is migrating out of the alternative investment category.
- Investment activity was constrained due to an insufficient supply of available product as health systems and providers own 83% of the medical office / outpatient clinic inventory. Investor demand has grown in sheer numbers, but supply has not kept pace.
- Two large transactions dominated 2016 sale activity – Starwood’s $838 million acquisition of Northstar’s 34-property MOB portfolio and Physician Realty Trust’s $660 million acquisition of 50 MOBs owned by Catholic Health Initiatives. 2016 sale volume was over $6 billion without those two transactions, still a record outside of 2015.
Stay tuned for next month’s insight.
JLL Healthcare Capital Markets
JLL Healthcare Capital Markets is the only national full service healthcare capital markets team in the real estate industry focused on medical office, hospitals, seniors housing and post-acute care. The team consistently transacts over $1 billion annually with unrivaled expertise and experience in investment sales, monetization, development debt and equity capital raise and advisory services for investor and provider clients. JLL has an extensive national and international presence that delivers local market knowledge and exceptional access to capital.
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