Hammond Hanlon Camp LLC Second Quarter Medical Office Building Report:  Medical Office Building Appeal Growing and Cap Rates Compressing As Flight To Quality Takes Place

posted on October 4, 2017

NEW YORK — Once seen as an alternative real estate investment, the medical office building (MOB) segment has grown in deal volume and presence to establish itself as a target asset class. The publicity of Healthcare Trust of America’s (NYSE: HTA) $2.75 billion acquisition of Duke Realty’s (NYSE: DRE) MOB portfolio has increased the interest of new entrants and foreign capital. Because the sector’s tenancy is fueled by demographic trends of the aging population, increasing utilization of healthcare, and growing integration of hospitals and health systems, the MOBs have grown in popularity as a flight to quality takes place for investors seeking stable yield as other real estate asset classes have come under attack. We expect traditional investors and foreign capital to allocate a greater proportion of their real estate investments toward the medical office sector as they seek yield backed by investment-grade credit health system tenants.

Inside the 2Q17 MOB Quarterly Update

• Key Transaction Highlights 

• Transaction Volume Trends 

• Regional Transaction Highlights

• Pricing and Cap Rate Trends

• Industry Rate Benchmark Trends

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