A lasting conversation among investors in the MOB sector has been the choice between On campus MOB investments and Off campus MOB investments. Comprising approximately 30% of the MOB stock (measured by SF), it should make sense that investment dollars targeted toward On campus MOBs should equal approximately 30% of all MOB transaction volume. There are some firms in the sector that prefer On campus investments so the argument that the On campus share of volume should generally be greater than 30% of all volume. The graph below shows transaction volume on a TTM basis broken out by On and Off campus MOBs. The limited data series shows the share of On campus MOB transaction volume generally meandering near to above 30% of all transaction volume through 2018. This supports the notion mentioned above. However, beginning in 2019, the share of On campus MOB transaction volume has been falling and it has reached just 16% of all transaction volume as of 3Q20. Is this a developing trend? Stay tuned as we will dig further into this with future research.
