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Home / Mergers/Acquisitions / The “On Campus” Medical Office Premium is 14% in 3Q14

The “On Campus” Medical Office Premium is 14% in 3Q14

December 15, 2014 by Mike Hargrave Topics: Mergers/Acquisitions

Investors paid an average of 14% more per square foot for an on campus medical office building (compared to an off campus medical office building) in the 3rd quarter of 2014. Revista tracked approximately 100 medical office building (MOB) transactions in the quarter. The average on campus MOB transaction was at $291 per square foot (SF) compared to $256 per SF for an off campus MOB.OnCampusPremium5

The “on campus” premium also held true on a yield basis. Investors earned an average initial yield of 6.19% (12 observations) for an on campus MOB in 3Q14 compared to a 7.14% yield (19 observations) for off campus MOBs.

Notable on campus transactions in the quarter included HCP’s purchase of the Market Street Medical Office Building in Philadelphia, PA. The 435,000 SF on campus MOB sold for just over $138 million. The price works out to $319 per SF and the reported yield was 6.5%. The building is 18 stories and is fully occupied by Children’s Hospital of Philadelphia and University of Pennsylvania Health System.

The Revista 3Q14 National Transactions Report carries offers more details on medical office and other healthcare real estate transactions. The report is available with a premium subscription to Revista, which starts at just $80 per month. Check pricing and details here.

Mike Hargrave
Mike Hargrave

Other Articles by Mike Hargrave:

    • The Return of the Portfolio Premium
    • A Look at 1Q25’s highest occupied Medical Office Market
    • Outpatient Real Estate Sector Riding a Wave of Strength!

Previous Post:More Construction, Financial Data Offered for the MOB Sector…
Next Post:Ventas Completes Merger of HCT, MOB cap rate at 6.2%!

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