But occupancy rates in the top metros have hit a new high, Revista says
By John B. Mugford
Based on preliminary data, Revista found that first quarter (Q1) MOB transactions volume was the lowest since 2014. (Slide courtesy of Revista)
Medical office building (MOB) sales in the first three months of the year dropped to the lowest first quarter volume for any year since 2014. But such a statistic does not necessarily reflect the overall strength of the product type and the market.
The first quarter (Q1) saw MOB sales totaling just $1.4 billion, a precipitous drop of about 74 percent from just a year earlier, when the MOB sales market was flying high and the Q1 2022 volume totaled $5.9 billion.
The current lull in sales – which is a continuation of a slowdown that started in the second half of 2022 – is most likely a reflection of what is taking place in the overall economy and the current rising interest-rate environment, as the U.S. Federal Reserve Bank continues to raise its target fund rate in an effort to stave off inflation.
The MOB sales market, in fact, might be lying low before returning to what can be considered a more normal volume in the months ahead. That’s according to a number of sector professionals who listened in on Arnold, Md.-based Revista’s Q1 2023 subscriber webcast that took place last Thursday, April 20.
A poll taken during the hour-long webinar indicated that a majority of the listeners believe the MOB sales volume will return to “normal,” which is typically about $3 billion per quarter, by early 2024.
The webinar was hosted by Revista Principals Mike Hargrave and Hilda Martin. Joining them was experienced healthcare real estate (HRE) investment sales broker Gino Lollio of Cushman & Wakefield. He, Travis Ives and Sushil Puria are executive directors and co-leaders of Cushman’s Healthcare Capital Markets. Mr. Lollio was on hand to provide, as Ms. Martin noted, some “boots-on-the-ground” perspective to the statistics presented by Revista.
As noted, the big news conveyed during the webinar was
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