Q2 2023
National Healthcare & Life Sciences Real Estate Investor Update
Download the Real Estate Investor Update
Key Takeaways from the Q2 2023 Issue:
Medical Office
• Healthcare real estate transaction volume in the second quarter totaled $1.8 billion, on par with the previous quarter. The year-to-date medical office sales volume of $3.5 billion is down 62% from the $9.2 billion recorded in the first half of 2022. However, the number of properties exchanged year-to-date is only down 15.6% from the first half of 2022, indicating a slowdown in portfolio transactions with the average deal size year-to-date standing at $9.6 million.
Life Sciences
• The average lab/R&D vacancy rate for the top 13 markets tracked by CBRE rose by more than 2% quarter-over-quarter and more than 4% year-over-year to 9.0%. The Q2 vacancy rate exceeded the historical average since 2016. The sharp rise in vacancy was partly due to 3.4 million sq. ft. of new construction deliveries in Q2 that were 45% preleased.
• Life sciences venture capital funding increased slightly quarter-over-quarter in Q2 to $4.2 billion, bringing the year-to-date total to $8.0 billion. 41 million sq. ft. of new life sciences space and conversions were under construction in Q2, with 25% of it preleased. Approximately 12 million sq. ft. is scheduled for delivery this year.
Debt
• The Federal Reserve’s 25 bps short-term rate hike on July 27th brought the federal funds rate to a target range of 5.25% to 5.50%. With an eye on the labor market, the consensus is the Fed will pause this month with a smaller predicted potential of an increase in Nov (economist survey is ~35% today vs. 60% a few weeks ago). In general, spreads have widened by 10-15 bps through mid-year.
For more information, please contact:
CBRE Healthcare Capital Markets
Chris Bodnar
Vice Chairman & Managing Director
+1 720 635 2653
chris.bodnar@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
Jesse Greshin
Vice President
+1 860 808 4810
jesse.greshin@cbre.com
Trent Jemmett
Senior Director
+1 858 646 4740
trent.jemmett@cbre.com
Cole Reethof
Director
+1 404 504 7864
cole.reethof@cbre.com
Josiah Gunter
Associate Director
+1 404 504 7936
josiah.gunter@cbre.com
Jaime Vantsa
Investment Sales Manager
+1 303 628 7455
jaime.jones@cbre.com
BlackBirch Capital – Investment Banking
Dan McNulty
CEO
+1 646 634 8694 dan.mcnulty@blackbirchcapital.io
Marc Amico
Managing Director
+1 917 297 1087 marc.amico@blackbirchcapital.io
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