Historically, Revista has categorized medical office buildings (MOBs) into two categories, on a hospital campus or off. However, recently Revista has developed a third category, adjacent. These are the properties that fall within a quarter mile of a hospital campus footprint. Conventional thought suggests that on-campus assets demand a premium, but what about the buildings just outside of a campus?
The graph below shows the average triple-net rent for the three categories. The rankings are as one would expect. The gap between on and off is about $1 in 2Q23, with adjacent lying in between. Adjacent has maintained higher rents than off-campus, but in the past year the gap has become tighter. All three tend to grow similarly, with a slope that has become slightly steeper in the past year.
A broad overlook of the top 125 metros shows that from a rent perspective, there is a notable distinction of the Adjacent category. Stay tuned as we will continue to examine how this category has a correlation with other fundamentals.
