MOB investors are adapting to limited supply, more competition and lower yields
By John B. Mugford
The ‘Investment’ panel at the Sept. 16-17 InterFace Healthcare Real Estate conference in Dallas included (from left to right); Jon Foulger, senior director acquisitions, MedProperties Realty Advisors; Sam Clark, VP, Cypress West; Chris Morgan, director, acquisitions, Big Sky Medical; Jeff Axley, managing principal, Ridgeline Capital Partners; and moderator Steve Leathers, senior managing director of Healthcare Capital Markets, Transwestern. (HREI™ photo)
With a limited supply of high-quality product, growing competition, higher prices and cap rate compression, medical outpatient building (MOB) investors are increasingly turning to other HRE assets, conversion plays and value-add properties.
That was the word from a group of professionals who were part of an investment-focused panel discussion at the recent InterFace Healthcare Real Estate Conference in Dallas. The session was titled “Pricing, Cap Rates & Competition: A Healthcare Real Estate Investment Update.”
With the recent uptick in portfolio offerings, some might dispute the notion that there is (or has been) a shortage of MOBs on the market. But the Interface panelists argued that there seem to be more portfolios available than the high-quality, single assets that many investors crave. As a result, strong competition for those single assets has driven up prices and driven down capitalization (cap) rates, or estimated first-year returns.
This is prompting some MOB investors to
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