Philip J. Camp
Brady R. Stern
Matthew T. Tarpley
E. Chris Byrns
Mitchell J. Levine
Stuart L. Gilbert
3333 Piedmont Road
Atlanta, GA 30305
H2C INDUSTRY INSIGHTS • REAL ESTATE
MOB Pricing Holds Steady in First Full COVID-19 Impacted Quarter
August 18, 2020
Medical Office Building Quarterly Update
ABOUT HAMMOND HANLON CAMP LLC
Hammond Hanlon Camp LLC (“H2C”) is an independent strategic advisory and investment banking firm committed to providing superior advice as a trusted advisor to healthcare organizations and related companies throughout the United States. H2C’s professionals have a long track record of success in healthcare mergers & acquisitions, capital markets, real estate, and restructuring transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value. Hammond Hanlon Camp LLC offers securities through its wholly-owned subsidiary H2C Securities Inc., member FINRA/SIPC. For more information, go to h2c.com
H2C REAL ESTATE INVESTMENT BANKING
The real estate investment banking professionals at H2C have successfully served as advisor for over 20 years on real estate transactions in excess of $12.5 billion nationwide. For more information on our real estate advisory group, please contact one of the adjacent H2C professionals.
Kelly T. Duong
Hammond Hanlon Camp LLC
623 Fifth Avenue
New York, NY 10022
311 South Wacker Drive
Chicago, IL 60606
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San Diego, CA 92121
This is H2C’s first quarterly medical office building (“MOB”) report since the impact of the COVID-19 pandemic played out through an entire quarter of activity. Notably, H2C had one of its most active quarters in advising health systems in their monetization and disposition efforts, with over $200 million in transaction volume advised.
While COVID-19 has had a dramatic impact on other asset classes, such as senior housing and retail, where values are purported to be down 20-25 percent since March 2020, the MOB sector has shown resilience in values through the quarter, with average cap rates nearly flat at 6.62 percent and average price per square foot growing to $290. MOB sales volume in the second quarter totaled $2.3 billion, the lowest second-quarter volume seen since Q2 2014; however, pricing and cap rates held firm. Also noteworthy is that first-half MOB sales volume is only down 3 percent from 2018 and 2019, thanks to a robust Q1.
Cap rates are nearly flat and values have held as demand
continues outpacing supply in desirable MOB asset class.