The hospital real estate sector has been gaining favor with investors in 2015. We have seen two high profile deals – the $1.75B Ventas/Ardent deal and the $900M Medical Properties Trust/Capella deal. Additionally, we have seen several other hospital real estate deals. Overall, volume in the hospital real estate sector has been a robust $3.3B through 3Q15 which is up from $2.4B from all of last year.
But has this impacted pricing?
The short answer is yes. One such measure that clearly shows this is the TTM average price per square foot trend. The graph below shows the trailing twelve month (or 4 quarter) average price per square foot for hospital real estate trades. It covers general acute care hospitals, acute rehabilitation hospitals, long term acute care hospitals and other specialty hospital types. Within Revista’s transaction module you can retrieve transaction comps and pricing for these breakouts. The average price in 3Q15 for hospital real estate was $361 per SF. This is a near term high and up 11% from the 3Q14 reading of $324 per SF. Other measures such as cap rate trends agree with this increasing price trend. Access hospital cap rates and other transaction reports by becoming a subscriber to Revista. Please contact Hilda Martin for pricing and access information.
