Q4 2022
National Healthcare & Life Sciences Real Estate Investor Update
CBRE
Download the Real Estate Investor Update
Key Takeaways from the Q4 2022 Issue:
Medical Office
• Healthcare real estate transaction volume in Q4 2022 was recorded at $3.0 billion, in line with the $2.8 billion sold in Q3 (excluding the HR/HTA merger), but with a sharp 41% decline from Q4 2021. Yearly sale volume recorded $15.4 billion for 2022, propped up by a record first half of the year for sales.
• Top quartile cap rates, representing core transactions, increased 80 bps (from 5.2% to 6.0%) from Q3 to Q4 reflecting the impact interest rate movement is having on core pricing. Q4 average cap rate was 6.6% and the year ended with a trailing 12-month cap rate of 6.2%.
Life Sciences
• Vacancies rose across most markets, bringing the national average to 5.7% in Q4 from 5.1% in Q3. However, the vacancy rate is in-line from a year prior, suggesting rates are stabilizing to normal levels after the frenetic activity of 2021.
• After declining for three consecutive quarters, venture capital (VC) funding increased by 18.4% in Q4. VC funding totaled $21.7 billion for the year, down 34.4% from the peak in 2021 but only 3.7% below 2020 funding and well above pre-pandemic annual totals.
Debt
• Most recently, the FDIC takeover of Silicon Valley bank has created a ripple effect through the banking system leading to liquidity issues at several regional banks as some customers pulled their funds. Banks are now under increased scrutiny and find themselves in a fight to regain the confidence of depositors. The uncertainty has driven up demand for risk-free bonds, which in turn has driven down indices 50 – 70 basis points in a week. The situation will undoubtedly be monitored closely by real estate investors, as the volatility not only impacts borrower confidence in the lending community, but also lender appetite for loans.
For more information, please contact:
CBRE Healthcare & Life Sciences Capital Markets
Lee Asher
Vice Chairman
+1 404 504 5965
lee.asher@cbre.com
Zack Holderman
Senior Vice President
+1 858 337 9412
zack.holderman@cbre.com
Jordan Selbiger
First Vice President
+1 404 923 1259
jordan.selbiger@cbre.com
Trent Jemmett
Senior Director
+1 858 646 4740
trent.jemmett@cbre.com
Cole Reethof
Associate Director
+1 404 504 7864
cole.reethof@cbre.com
Josiah Gunter
Associate Director
+1 404 504 7936
josiah.gunter@cbre.com
Jesse Greshin
Senior Analyst
+1 860 808 4810
jesse.greshin@cbre.com
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