The office market continues to struggle with the volume of employees working from home or on a hybrid schedule coming out of the pandemic. What was initially thought to be a transient change is now becoming a new normal, which translates into employers requiring less space. Highlights in the news of late have shown distressed sales of beautiful downtown office buildings in some markets like San Francisco, as investors see the writing on the wall. With investors exiting the office market and/or looking for diversification, medical office buildings can offer an attractive alternative. MOB occupancy has been increasing to a cyclical highpoint of over 92% while office has fallen to 87.5% as of the end of 2022. Although historically viewed as a subsector of office, the dynamics of the users of medical office space are completely different. Hospitals, physicians and provider groups rely on the demand for healthcare services, something that is durable and less affected by market cycles and/or unforeseen events. This reliable performance is particularly pertinent now as we navigate current market uncertainty. Stay tuned to Revista to stay on top of this and other developing trends!
