Thought Leaders: CBRE 1Q 2013 National Medical Office Investor Update

CBRE 1Q 2013 National Medical Office Investor Update

Included in this edition:
• Overview of 1Q 2013 MOB Transactions
• National Medical Office Cap Rate Trends
• National Medical Office Sales Volume
• Healthcare REITs Down, Not Out

• Overview of 1Q 2013 MOB Transactions

It’s widely known that REITs, as dividend generating stocks, are interest rate sensitive. Investors flock to dividend related stocks when interest rates decline and tend to retreat as interest rates rise. Over the past several weeks, REIT share prices have been under pressure due in part due to Federal Reserve Chairman Bernanke’s commentary on May 22nd, which indicated an end to Quantitative Easing 3 (QE3) sooner than the market had expected. Since Bernanke’s commentary, the 10-year treasury has increased approximately 15% as of June 12th, and as a result, REIT stocks (as measured by the MSCI U.S. REIT Index – RMZ) have decreased by 13% during the same time period. While the market is experiencing record setting pricing for medical office properties, this recent interest rate fluctuation illustrates that current pricing levels will not be here forever.

While REITs’ cost of capital may be susceptible to interest rate volatility, it is evident that their allocations to the market have not changed. In fact, CBRE’s EMEA (Europe, Middle East
and Africa) Healthcare Capital Markets Group recently made a trip to the United States to meet with many of the well capitalized investors that are seeking opportunities abroad given
the lack of supply in the U.S. Our CBRE European counterparts met with Ventas, Health Care REIT, HCP, Medical Properties Trust, American Healthcare Investors and many others during their tour to discuss their desire to invest overseas and the many monetization opportunities available throughout the EMEA.

To read the complete report, please visit: 1Q 2013 MOB Investor Update