• .
    .

Thought Leaders: Medical office sales poised for a banner 2021 year

Healthcare Capital Markets

Healthcare Perspectives

August 2021

Medical office investment trends bode well for record year in 2021

Medical office sales ($ billions)

Source: JLL Research, RCA

Key points:
• While first half medical office sales in 2021 were muted due to a slow start in 2021, JLL research shows reasons for optimism for another record sales year rivaling or exceeding the recent 4-year average of nearly $14 billion. First half sales were $5.2 billion, approximately 40% of average annual volume, boding well for the full year as the second half typically drives 60% or more of yearly activity. Single asset sales in the first half at $4.2 billion exceeded the first half 2020 level and should rival or exceed the peak 2019 level based on JLL’s pulse on market activity.
• Notably, sales of major portfolios in the first half were spare. However, JLL forecasts total portfolio volume in 2021 of nearly $6 billion in aggregate, based on deals that have closed in the second half, are under contract, and in advanced offer rounds. The $6 billion level rivals the 2017 record. However, 2017 included the outsized $2.9 billion sale of the Duke Realty healthcare properties, comprising nearly half of the activity. With portfolio sales typically contributing 40% of total sales, there is reason to suggest that total sales volume will be record breaking in 2021. JLL’s optimism is supported by nearly $3 billion in healthcare property capital markets transactions closed by the firm year to date.
• In spite of and because of the COVID era, investor interest in this asset class is swelling and truly hitting its stride with healthcare properties’ long-term, reliable income generation. New entrants piled into the asset class, which was fortified by the strong operational performance of medical office tenants during COVID with high rent collections at 99%, combined with continued high average occupancy of 92.0% and no deterioration in rent levels. Major institutional investors Nuveen and Wafra, to name a few – have made big splashes in 2021 through major portfolio acquisitions and/or recapitalizations. Stay tuned for announcements of other new players in healthcare in the months ahead, often household institutional names, as more major portfolios trade. Institutional investment drives liquidity and sale prices in real estate sectors.
• The solid and stable performance of medical office has solidified this defensive asset class in investors’ views and attracted new investment capital even in the face of remarkable global economic strain.

Recent activity

New Listing – Investment Sale

Ardent Medical Office Portfolio
762,780 s.f.
Texas & Kansas
New Listing – Investment Sale

University of Kansas Health System Great Bend Medical
63,978 s.f.
Great Bend, KS
View listing >>>

New Listing – Investment Sale

Patriot Plaza
65,658 s.f.
Hackettstown, NJ

View listing >>>

Closed – Debt Placement

Arkansas Heart Hospital
159,196 s.f.
Little Rock, AR
Closed – Debt Placement

Omega Healthcare
77,511 s.f.
Rockville. MD
Closed – Investment Sale

Auldern Academy
20,400 s.f.
Siler, NC

Have you seen the JLL 2021 Healthcare Real Estate Outlook? Click on the link to access this year’s report.
Want to receive more deal opportunities? Register for the JLL Investor Center, our new portal offering secure and easy access to our global inventory of investment opportunities.

From any device, anywhere in the world, you can search and view listings, receive invitations to private listings, and edit your preferences so you only receive opportunities that meet your specific criteria. Register for the Investor Center here>

Contact us:

Our national team

View past newsletters

Learn more

Contact us

Although information contained herein has been obtained from sources deemed reliable, neither JLL nor any of its clients makes any guarantees or representations, express or implied, as to the completeness or accuracy of such information. Any projections, opinions, assumptions or estimates used are for example only. Neither JLL nor any of its clients accepts any liability for loss resulting from reliance on such information. There may be material differences between projected results and actual results. Any property offered for sale or lease may be withdrawn without notice. If the recipient of this information has signed a confidentiality agreement regarding this matter, this information is subject to the terms of that agreement. Copyright © 2021 Jones Lang LaSalle IP, Inc. All rights reserved.
This email was sent to mwolf@wolfmarketing.com by Jones Lang LaSalle Americas, Inc.
200 E Randolph Street, Chicago, Illinois, 60601, United States
View Privacy Policy
Unsubscribe from ALL Emails
Update Preferences

The full content of this article is only available to paid subscribers. If you are an active subscriber, please log in. To subscribe, please click here: SUBSCRIBE

Existing Users Log In