The year 2018 proved to be healthy one for new medical office building (MOB) construction projects, which is certainly music to the ears of professionals involved in the healthcare real estate sector.
The good news comes by way of the third annual Outpatient Healthcare Real Estate (HRE) Development Report released late last week by Revista, a research firm that compiles data for the HRE sector, in conjunction with Healthcare Real Estate Insights (HREI), which provides news and trends in healthcare facility development, financing and investment.
While the report, also known as the Revista development survey, shows a slight drop in the number of new MOBs completed in 2018, with 464, compared to the last two years, 2016-17 (486 and 469 projects, respectively), the year did see an increase in square footage and aggregate MOB project values nationwide.
The total MOB square footage completed last year was 24.3 million, a 17 percent increase from the previous year, and the highest total since Revista began its MOB developer survey in 2015. In addition, the total value of the projects completed was $11 billion, or a 27 percent increase over 2017.
“Overall, construction completions were up in 2018 compared to 2016 and 2017,” Mike Hargrave, co-founder and principal with Revista, tells HREI. “While there were fewer projects, both the square footage and value were higher than in 2017 and 2016. This data supports the trend of developers and contractors delivering larger and more complex outpatient projects in recent years.”
According to the report, third-party firms financed and own about 25 percent of the MOB projects completed in 2018, with healthcare providers, consisting mostly of health systems, self-developing the rest.
The Revista Outpatient HRE Report is the only independently verified research report to look exclusively at MOBs and other outpatient facilities and the firms that develop such projects. The purpose of the survey is to provide a comprehensive look at the outpatient HRE development market and to identify the leading developers of MOBs, ambulatory surgery centers (ASCs), clinics, freestanding emergency departments (FEDs), imaging centers, urgent care centers (UCCs), retail medical buildings and other purpose-built outpatient medical buildings.
One of the main goals of the survey is to identify the top developers from the previous year. The Outpatient HRE Development Report lists the top developers in three categories: total square footage started during the year, total square footage completed, and total square footage started or completed.
For 2018, here are the top 10 leaders in the “Projects Started or Completed” category, as ranked by square footage:
- Anchor Health Properties with 11 started or completed projects totaling 437,448 square feet;
- Pacifice Medical Buildings (PMB) with four projects totaling 405,429 square feet;
- Rendina Healthcare Real Estate with four projects totaling 330,769 square feet;
- NexCore LP with seven projects totaling 311,460 square feet;
- Trammell Crow Company with two projects totaling 256,810 square feet;
- Ryan Companies with seven projects totaling 240,137 square feet;
- Loudermilk Construction with two projects totaling 200,757 square feet;
- Ellicott Development with one project totaling 194,000 square feet;
- Carnegie Management & Development with two projects totaling 192,495 square feet;
- Meadows & Ohly with two projects totaling 177, 884 square feet.
Charlottesville, Va.-based Anchor Health Properties was the top developer in terms of projects started in 2018, with seven developments totaling 311,000 square feet.
San Diego-based PMB led the way in projects completed in 2018, with two developments totaling 281,000 square feet.
Mr. Hargrave notes that 25 third-party development firms returned surveys. Revista also identified projects from another 140 companies through various sources. He says any firms wishing to participate in future surveys should contact him at firstname.lastname@example.org.
John B. Mugford is the editor of Healthcare Real Estate Insights. For more information on HREI – please visit HREInsights.com