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Feature Story: MOB construction remains strong

Revista data also shows that third-party developers grew market share in 2020

By John B. Mugford

Healthcare real estate construction starts and completions were comparable to recent years in 2020, Revista says. This hospital in Marathon, Fla., is one of 145 hospitals currently under way nationwide. (Photo courtesy of Baptist Health South Florida)

Although many healthcare real estate (HRE) professionals correctly predicted that medical office building (MOB) sales would remain strong during the COVID-19 pandemic, they did express some concern that construction numbers would fall as providers would be forced to focus on myriad other concerns than moving into new buildings.

But that hasn’t been the case so far.

“Medical office construction has remained very strong throughout COVID, both in terms of starts and completions,” Hilda Flower Martin said during a Jan. 26 Revista webcast.

Ms. Martin, a principal with the HRE research and data firm, added, “Completions slowed a little bit towards the end of the year (2020), but starts remain pretty much in line (with past years), as there was about 20.9 million square feet of MOB space started” as of the fourth quarter (Q4) of 2020 on a trailing 12-month basis (TTM).

The MOB projects being built are typically well pre-leased and continue to get larger, Ms. Martin added, saying the average size of MOBs being built now tops

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