Nationwide investors appetite for medical office buildings (MOB) remains strong. During the recent real estate recession, investors came to realize that MOB’s as a class were very difficult to reproduce and formed their own market as a result of clustering around hospitals and academic research centers.Investors realized that doctors didn’t like to move because of the cost and inconvenience to the patients.
According to research conducted by real estate services and investment firm Jones Lang LaSalle (JLL), more than 120 MOB properties valued at $1.8 billion were sold in the first half of 2013, This year’s transaction volumes are expected to meet or exceed 2012 levels. A total of 171 MOB properties sold during calendar year 2012 at an average value of $13.2 million, or $161 per square foot. In comparison, of the 124 MOB’s sold so far this year, the average value was $14.8 million, at an average price per square foot of $197, the JLL report said.
JLL pointed out that low level of vacancies, loss of income for the investor becomes less likely and the need to continually reinvest in buildings for new tenants declines. Less frequent leasing commissions make for a more favorable climate, too.
“All of that adds up to a great opportunity for the New Orleans BioDistrict. With more than 2.2 million square feet of new hospitals and medical research facilities coming on line, doctors and their practices are sure to follow” said James P. McNamara President and CEO of the BioDistrict. “Already we are fielding calls from developers interested in the area and being part of the growth.”elated articles
- Healthcare Trust pays $63M for 6 Fla. medical office buildings (bizjournals.com)
- Construction starts on HCA’s Medical Center at Alliance and will include a 50,000-square-foot medical offices building (star-telegram.com)