It makes sense that transaction activity would slow in 2Q20 as the MOB sector was in the midst of the COVID-19 pandemic. In fact, Revista’s 2nd Quarter subscriber webcast showed that preliminary MOB transaction volume in 2Q20 was $1.4B (now updated to $1.5B) which was well below the $3.3B recorded in 2Q19.
One of the drivers of the slowdown in activity is the volume of mortgage financing. Revista tracks recorded mortgage financing for the almost 50,000 medical office buildings in its database. Below is a graph that shows the number of new distinct mortgages on MOBs on a weekly basis for 2020, 2019 and 2018. The data runs through week 24 (or the week of June 7, 2020). You can see that mortgage financing began to fall in week 15 which was the first week of April 2020 when just 29 MOB mortgages were recorded in the week. Since then, financing has fallen further with just 10 mortgages recorded in week 24.
Revista will continue to monitor this metric for further June and July updates.