RevistaMed
Historically, Revista has categorized medical office buildings (MOBs) into two categories, on a hospital campus or off. However, recently Revista has developed a third category, adjacent. These are the properties that fall within a quarter mile of a hospital campus footprint. Conventional thought suggests that on-campus assets demand a premium, but what about the buildings just outside of a campus?
If you have been staying up to date with Revista’s most recent construction data, you know that over the past few quarters, construction has been down across the board. However, the magnitude of the depression may depend on the characteristics of the project.
Within the past year, the average cap rate for a medical office building was 6.5. This is up about 60 basis points from one year ago.
Recently we’ve been observing a downward trend, which has been reinforced by the current quarter. On a quarterly basis, 2Q23 only had around 2 million square feet start construction.
When looking at all outpatient projects, Hammes developed the most with a count of 12, for a total of 769,658 sf.
Overall, Revista tracked 44.9 million square feet of outpatient developments in 2022, with 18.8 million (42%) being done by third-party developers
With 23.4M for MOBs and 27.7M for hospitals, both are falling off the highs seen in 2022.
What level of sales activity are we seeing around alternative types of medical real estate?
Despite economic headwinds, rehabilitation hospitals have seen escalated development over the past couple of years. The chart below focuses on the scope of projects that started construction each year. We …
Last week the Federal Open Market Committee (FOMC) decided to raise the target range for the federal funds rate to 4.25% – 4.5%, which was a 50-bps increase. After several 75-bps bumps...
If we look at construction starts over the past year, we can see that a handful of markets have remained very strong despite increasing market headwinds. At a national level, annualized construction starts have been stable throughout 2022, hovering around 26 million square feet.
An inversion of the yield curve is a well-known indicator of a coming economic downturn. Using the difference between the 10-year and 2-year treasury spread, we can see that the …
If you have been following our MOB transaction trends lately, you know that volume has been very high over the past year. In the second quarter of this year, Revista …
If we take a look at the overall occupancy trends for the top 50 metros, we can see that a shallow U-shape has formed over the past few years. While this pattern shows a modest dip followed by a recovery, this may not be the story for individual metros.
This morning the BEA released its first official estimate of real GDP growth for 2Q2022. It came in at -0.9. The revised official rate from last quarter was -1.6, and depending on the definition used, some would now say that we are in a recession.
With the cost of construction materials continuing to rise, and interest rate hikes on the horizon, how will new MOB developments be affected?
We have continued to see cap rates compress throughout the first quarter of 2022. The median has gone up slightly, but...
Are MOB rents significantly higher when in close proximity to a hospital? To isolate the effect a property’s distance from the nearest hospital has on rent, we looked at a dataset of MOB’s that are not affiliated with a hospital, nor directly on a hospital campus.