Our expertly crafted investment strategies transform healthcare real estate opportunities into profitable ventures.
Why Healthcare Real Estate
Medical Office – Using Jobs
Healthcare employment increased by 650,000 jobs in 2023 with accelerated growth throughout 2024.
Medical office using jobs grew by 170,000 or 3.8% year over year
Lack of New Development
Since 2020, construction starts for MOBs remain below average
Supply continues to increase pushing occupancy to historic highs
Fundamentals
Vacancy vs Asking Rent
Occupancy is hovering around historical highs at 92% nationwide
Annual asking rents are up 3.2% year over year
Historically Low Activity Sales to Reversion
Sales volume is off 40% from historical 2022 highs
As interest rates have risen, so have cap rates trending to 7% on average, over 100 bps higher from 2022
Healthcare Real Estate Sector
Demand
Large and growing aging baby-boom population, living longer lives. People over 65-years-old visit the doctor 2.5 times more than the rest of the population.
Healthcare spending projected to grow 5.5% annually to $6 trillion by 2027
Supply
Healthcare real estate market is large and fragmented, worth a combined $1 Trillion, including senior living
63% of healthcare real estate is still owned by hospitals, providers, or the government
Hospitals and providers continue to sell their real estate to re-invest in their core business
Construction Trends
MOB construction has fallen from 21-23 million square feet annually to 17.7 million square feet in 2023
Construction costs are up 40% over the last 3 years, driving new rents significantly higher
MOB construction starts have remained stable, but the pandemic has prolonged delivery timelines
Occupancy Trends
MOBs stable long-term occupancy rates around 90% over the past decade; hit 92.3% in Q223
The drop in deliveries, as noted above, is projected to result in a reduction of the vacancy rate
Rent Trends
Average national gross rents for MOBs grow consistently, now averaging 3% annually
With construction costs, increased rent bumps and higher occupancy, rent growth is expected to increase
Consolidation in the healthcare industry continues to drive demand for space