MOBs MIGHT NOT BE SO LUXURIOUS ANYMORE
By John B. Mugford
Dear Reader:
As we look back a mere two or three years, it seems light years from where we are now.
Residential construction was booming, housing values were skyrocketing and most Americans saw no end to prosperous times.
In healthcare real estate, the boom years were exemplified by rock-bottom cap rates for medical office buildings (MOBs), big investments in MOBs by institutional investors, easy loan terms and, perhaps, the increasingly generous amenities that were added to some newly developed MOBs and hospital spaces.
As Vince Cozzi of Ventas Inc. reminded us at November’s meeting of the Editorial Advisory Board of Healthcare Real Estate Insights™, quite a few MOBs were designed to have the look and feel of spas, and quite a few hospitals were built to look and feel like five-star hotels. The idea was to get a leg up on one’s competition.
These days, however, ostentation is out of fashion. From gas-guzzling SUVs to corporate jets to Wall Street bonuses, anything that smacks of excessive spending can spark an embarrassing backlash.
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