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Feature Story: What to expect in a red-hot MOB sales market

InterFace investor panel discusses the market and how firms are adjusting

By John B. Mugford

The May 13 InterFace MOB sales panel discussion included (clockwise from the upper left): Chip Conk of Montecito, Kevin Nishimura of Artemis Real Estate Partners, moderator Lee Asher of CBRE, Andy Lawler of Cornerstone Companies and Jack Gavin of Remedy Medical Properties. (HREI photo)

As the country emerges from the COVID-19 pandemic and the demand and pricing for medical office buildings (MOBs) remains as hot as ever, perhaps buyers looking for hidden opportunities might want to venture into a-once-desirable, but-now-downtrodden area: downtowns.

“You know, maybe there is an opportunity right now in the urban centers, because pricing might not be going as strong there as in other places,” said Andrew Lawler, a Charlotte, N.C.-based regional partner with Indianapolis-based Cornerstone Companies who sources opportunities for that healthcare real estate (HRE) firm in the Southeast.

“And, you know, I think that in the next few years (downtowns will) come back, and then you’ll have those assets. So, that’s something to look at, really.”

Mr. Lawler’s observation was part of a panel session that covered lots of other topics, ideas and even pointers for those involved in acquiring MOBs. The panel session was titled, “Who’s Buying, Who’s Selling and Transaction Trends in the Red-Hot Investment Sales Market,” and it was part of the InterFace Conference Group’s 2021 Healthcare Real Estate Conference that was held virtually in mid-May.

Moderated by Lee Asher, an MOB sales broker and the vice chairman of the U.S. Healthcare and Life Science Capital Markets team with CBRE Group Inc. (NYSE: CBRE), the other panelists included: Jack Gavin, SVP of investments with Chicago-based Remedy Medical Properties; Chip Conk, CEO of Nashville, Tenn.-based Montecito Medical Real Estate; and Kevin Nishimura, principal of acquisitions and asset management with Chevy Chase, Md.-based Artemis Real Estate Partners.

With the pandemic putting such a new and positive light on MOBs – in response to the product type once again showing how recession-resistant it is — demand from investors of all types, including those who previously focused on other sectors of commercial real estate (CRE), continues to rise without a matching increase in supply, according to Mr. Asher.

“It’s been six years running now that I’ve been telling clients that

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