• Skip to main content
  • Skip to header right navigation
  • Skip to site footer
  • Blog
  • Free Resources
RevistaMed

RevistaMed

  • About
    • Meet Revista
    • Advisory Board
    • Partners
    • Press
    • Rising Leaders Council
    • Sponsorship
    • Contact Us
  • Events
  • Why Subscribe?
    • Featured Products
    • Business Development
    • Underwriting & Due Diligence
    • Asset Management
    • Capital Markets
    • Site Selection & Development
    • Leasing
  • Subscriber Login
Home / Industry News / HTA-Duke Realty Deal Might Have Ripple Effects

HTA-Duke Realty Deal Might Have Ripple Effects

July 25, 2017 by Murray Wolf Topics: Industry News, Mergers/Acquisitions

The biggest medical office building (MOB) deal of 2017 so far could have more of an impact on the healthcare real estate (HRE) sector than just making headlines.

The transaction, of course, had Indianapolis-based Duke Realty Corp. (NYSE: DRE) announcing May 1 that it agreed to sell most of its MOB portfolio to Scottsdale, Ariz.-based Healthcare Trust of America (NYSE: HTA) for a maximum of about $2.75 billion. As of the end of the second quarter (Q2), HTA said it had closed on the acquisitions of 69 properties for about $2.2 billion, as 11 properties were claimed by health systems under rights of first refusal (ROFR) clauses. HTA was still expecting to acquire three properties and a land parcel for $138 million.

That’s certainly big news for the companies directly involved. But industry sources tell us that the ripple effects of the HTA-Duke realty transaction are already being felt beyond Scottsdale and Indianapolis. Here are two potential implications:

  • Increased visibility for MOBs as an investment class, creating even more demand for the product type from large, sophisticated and well-capitalized institutional and foreign investors, many of whom have already been showing increased interest in recent years.
  •  An influx of additional MOBs into the market, as current owners might decide to capitalize on the sector’s currently low cap rates and historically strong pricing for high-quality facilities affiliated with stable health systems. HTA says the capitalization (cap) rate, or first-year estimated return, that it paid for the Duke Realty portfolio was from 5 percent to 5.25 percent. A number of industry sources, however, say the deal’s cap rate was less than 5 percent.

 

For more implications of the deal and insights into what those potential changes could mean for the HRE sector, please visit: HREInsights.com.

Murray Wolf
Murray Wolf

Other Articles by Murray Wolf:

Previous Post:Office with Medical or MOB?
Next Post:Conference Sessions Announced – New Bonus Sessions

Sidebar

Topics

  • Construction/Development
  • Industry News
  • Leasing/Property Management
  • Mergers/Acquisitions
  • Policy/Legislation
  • Real Estate Financing/Capital Markets
  • Revista Best Practices
  • Revista News
  • Sponsor Spotlight
  • Transactions
  • Uncategorized

Recent Posts

  • MOB Transaction Volume Cools in 4Q, Cap Rates Creep Up
  • Rehab Hospital Projects Maintain Strong Pipeline
  • MOB Construction Off Recent Highs in 4Q
  • The Fed’s Expectations for 2023
  • Construction Starts have Remained Strong in Select Markets

Archives

Upcoming Events

  • There are no upcoming events.

Other Free Resources

Industry Directory

Search for and/or list your medical real estate services in Revista’s medical real estate directory.

Reports & White Papers

Download free reports & white papers on medical real estate.

Add Lease/Sale Listing

Revista provides free lease/sale listings for healthcare real estate.

Ready to Schedule a Demo?

Get in Touch Now
  • Why Subscribe?
  • Events
  • The MOB Scene
  • Add A Directory Listing
  • Add Lease/Sale Listing
  • Contact Us
  • Sponsorship
  • About
  • Terms of Use
  • Press

SIGN UP FOR MOB SCENE NEWSLETTER

  • Twitter
  • Facebook
  • LinkedIn