H2C INDUSTRY INSIGHTS • REAL ESTATE
4Q20 Medical Office Building Report
Medical Office Building Values Resilient Through Volatile Year
Medical office cap rates reached historic lows as demand for medical office buildings remained strong in a supply constrained market.
Few asset classes have demonstrated the resiliency that medical office building (“MOB”) values have shown in 2020, a year that was unlike any other due to the impact of the COVID-19 pandemic. An H2C analysis shows that while COVID-19 decimated valuations of hotel properties, retail, and senior housing, average cap rates for MOBs hit an all-time low of 6.57 percent, while average price per square foot exceeded $300 for the first time. Total MOB transaction volume in 2020 reached $11.3 billion, marking the seventh consecutive year with over $10 billion in volume. However, MOB sales volume was 14 percent lower than in 2018 and 2019. (See Figure 1.)
Philip J. Camp
Brady R. Stern
Matthew T. Tarpley
Kyle E. Hopkins
E. Chris Byrns
Mitchell J. Levine
Stuart L. Gilbert
Evan T. Gaines
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