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 reopened. In 2022, growth began to accelerate with the arrival of record inflation. This acceleration continued through the first quarter of this year. Same store MOB rent growth in 1Q22 stood at 1.9% and a year later had reached 2.8%. In 2Q however, it leveled off and remains at 2.8%. This occurred in tandem with overall inflation cooling. Unlike other commercial real estate sectors which have seen bigger fluctuations in rents, medical office has seen less of a dramatic uptick. This may mean that the shift upward over the last year could be stickier. Where the typical rent bump would be around 2% per year, now the generally accepted increase is 3% per year. This is seen both in the Revista rent growth data (which is mostly based on marketed asking rates) as well as feedback from our spring Broker Survey where 71% of respondents agreed that typical annual rent bumps written into recent leases are closer to the 3% mark. Stay tuned to see what happens in the coming quarters!
Source and Copyright: Revista. Data believed to be accurate but not guaranteed and is subject to future revision. Use of this data is permitted subject to terms and conditions detailed on data.revistamed.com/terms-of-use and with proper credit to Revista or Revistamed.com.
