RevistaMed
Revista held its 4th quarter, 2023 subscriber webinar recently. During the webinar, it was reported that occupancy rates were continuing to rise for Medical office properties in the top 50 metros.
For all of 2023 investors have been waiting for more clarity on the monetary policy path. The FOMC meeting last week provided what many have been waiting for. The median projection for the federal funds rate is now 4.6 for the end of 2024. This leaves room for three 25 basis point cuts throughout the year. While not shown in the graph below, the full range of forecasts for 2024 is 3.9 – 5.4. This indicates that all the meeting participants are predicting no rate hikes in 2024, which is a first for this year.
For healthcare tenants in costal markets such as Los Angeles, San Jose or San Francisco, it is understood that higher rent levels come with the territory. Historically hard to build, high demand markets on the coasts have allowed rent levels to build over the years. In fact, the 2 most expensive rent markets (of the top 50 metros) for MOBs in 3Q23 are San Jose ($45.81 avg NNN rent) and San Francisco ($41.00 avg NNN rent).
Development and acquisition activity is currently suppressed in the medical office sector. However, this does not reflect a wavering in the underlying performance of medical assets. The graph below is from our 3Q23 Industry Fundamentals Report, which tracks a group of large medical office portfolios containing approximately 150 million square feet. It shows the average NOI per occupied square foot, which has continued to tick up, now at a level of $23.20.
It is no secret that many healthcare services and procedures are increasingly moving towards an outpatient setting. Advances in technology, cost efficiencies and other factors have enabled this move which has led to consistent and steady growth of demand for outpatient space, and the underlying supply of such space. Revista normally tracks the supply/demand picture through its reporting of absorption, completions and occupancy rates.
Revista recently held its 3Q23 Subscriber Webinar. One of the topics discussed was rent inflation. The charts below show Avg. NNN and Avg. 90th percentile base rents for medical office …
The year of 2023 has brought significant drops in sales activity across the commercial real estate sector. The higher cost of capital is driving investors into cautiousness and the healthcare real estate market is not immune …
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?
Healthcare Real Estate (HCRE) spending on construction has established a recent peak in 2023. Revista tracks Hospital and Medical Office (or Outpatient Medical) construction based on total project values including land, hard and soft costs and buildout.
Historically, Medical Office Building year-over-year rent growth has been right around the 2% mark. During the pandemic shutdowns there was a meaningful slowdown, but it rebounded shortly after as businesses …
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.
J As a physician-owner of your medical real estate, it is important to understand the factors that can impact the value of your building. Additional variables arise when partners have varying interest in the practice …
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.
The Northeast and Pacific Coast markets have always had some of the highest occupancy rates for medical office buildings being the more expensive, high barrier-to-entry cities. However, considerable growth in …
Transaction activity for MOBs has certainly slowed in 2023 due to higher interest rates and tighter lending requirements, but deals are still getting done. A bright spot still seems to …
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.
Over the last 30 years, there has been an influx in Ambulatory Surgery Centers (ASCs) for reasons including, but not limited to, physician demand, employee retention, rising case migration and …
When looking at all outpatient projects, Hammes developed the most with a count of 12, for a total of 769,658 sf.