About Knowledge Leader. According to one source, telehealth usage is 38 times higher than before the pandemic. Such Investments are only suitable for accredited investors who understand and willing and able to accept the high risks associated with private investments. EquityMultiple does not make any representation or warranty to any prospective investor regarding the legality of an investment in any EquityMultiple Investments. Medical office tenants appreciate the proximity to other retail anchors like grocery stores and pharmacies, local neighborhood services that already draw their target demographic. It also opens the door to physicians looking to support their operations through on-site retail, such as dermatologists that sell their own private label skincare products or endoscopists who sell weight-loss programs. The transaction values the portfolio at $1.78 billion and is expected to generate $1.3 billion in proceeds for Medical Properties Trust. Despite being in the early stages of 2022, the . This Q4 retail quarterly index report reveals how economic headwinds impacted key retail CRE categories during the critical holiday shopping season, and what their performance tells us about consumer behavior and brick-and-mortar retail in the year ahead. The combination will be the fourth largest commercial mortgage REIT, the companies claim. Medical office real estate was once considered so highly specialized that few individual investors wanted to add it to their portfolios. Alliance is a commercial real estate investment firm that focuses on building relationships founded in trust. A panel of industry experts that [], Economist John Chang, GlobeSt panelists still tout the sector over the long haul By John B. Mugford Its been a hell of a year, right? In making this statement, John Chang, senior VP and national director of research and advisory services with Calabasas, Calif.-based Marcus & Millichap Inc. (NYSE: MMI), was not only saying that [], Demand is strong for services and facilities, but roadblocks are holding up development, according to panel at InterFace Healthcare conference By John B. Mugford NASHVILLE, Tenn. As the country has dealt with the COVID-19 pandemic in recent years, behavioral health has become a national concern as more and more people struggle with a variety [], Posted in Behavioral Health, Feature Story, HREI editorial board members discuss the current difficulties associated with debt By John B. Mugford Spooked by economic uncertainty, most major publicly traded healthcare real estate (HRE) lenders have put their pencils down for the rest of 2022, making it difficult for developers and investors to obtain debt. Individual investors are following suit. No offer or sale of any Investments will occur without the delivery of confidential offering materials and related documents. New emerging healthcare models like CloudClinics may inspire more unique healthcare spaces to enter the market. These trends provide evidence that life sciences and biotech could have a positive outcome in 2022. UNLMTD Real Estate Group. Construction of new medical office buildings tends to lag the construction of other property types, in large part because these facilities are expensive to build and often require purpose-built facilities. Copyright 2022 Colliers International According to Stifel healthcare investment banking leaders, healthcare spending is currently about 18.5% of the GDP. The property consists of over 178,000 square []. Houston, Tampa, Phoenix, and South Florida have among the highest net absorption rates. Indeed, they have particular quirks that are important for investors to understand. If there is one thing we can take away from 2020, it is that healthcare must be delivered physically and virtually. Any investment information contained herein has been secured from sources that EquityMultiple believes are reliable, but we make no representations or warranties as to the accuracy or completeness of such information and accept no liability therefor. The commercial real estate landscape has been shaken up over the past 18 months, with challenges presented for both businesses and landlords alike. In Boston, a market known as one of the strongest in the life sciences segment, laboratory vacancy rates are about 1.7%. Source: Real Capital Analytics, February 2021. As noted above, medical office buildings have historically been located on or near hospital campuses. Founder & CEO | Alliance Group Companies. That is a slightly higher percentage than it has been over the last decade. Source: CBRE US Research, Medical Office Trends 2021: https://www.cbre.us/research-and-reports/US-Medical-Office-Trends-2021. In the medical office space, competition is not inherently harmful. Those found in rural areas tend to be designed specifically for patient treatment. Class A medical office buildings tend to be newer with modern-day layouts, systems, and amenities. JLL Healthcare provides a full range of real estate and facilities . By all indications, medical office is a resilient sector and as proven during both the Great Recession and pandemic, can weather economic downturns better than other property types. Receive our weekly newsletter with the latest posts and insights. That change [], GlobeSt panel remains upbeat about the prospects for LSRE By Murray W. Wolf As we all know, were in a period of economic uncertainty that is resulting in a slowdown of life sciences real estate (LSRE) transactions, financing, development and leasing activity. Today, the medical office has emerged as a darling among commercial real estate asset classes. Another reason why real estate investors are bullish about medical office is because of its low vacancy rate compared to traditional office. Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. Using Debt for Real Estate Investing: Is It a Good or Bad Idea. The healthcare sector is one of the labor markets most stable industries. At the other end of the spectrum is Class C medical office, which is older buildings (perhaps 1970s or 1980s vintage) that likely have lower ceilings, fewer windows, and more occasional patient and employee amenities. Available office and lab real estate in Boston Q2 2022, by district and type; The most important statistics. Therefore, MOB developers tend to be highly disciplined and do not build on spec; instead, they work to create an ecosystem of healthcare tenants that compliment one another (e.g., dentists, physicians, physical therapists and other specialty care providers). According to CBRE data, the average cap rate on sales of MOB facilities compressed by about 20 basis points year-over-year in 2020, with the average cap rate for portfolio sales declining by 100 basis points to about 5.52%. Acquires $149 Million in Medical Real Estate During 2022. We maintain an ongoing relationship with healthcare industry personnel to ensure we are keeping up with the latest news in the sector. As we navigate the 2022 commercial real estate asset classes, keep an eye on these trends and opportunities. Activist investor Jonthan Litt owns a stake in Healthcare Realty, which is proposing to buy Healthcare Trust of America Inc. Economic growth and a healthy labor market are key drivers for a sustainable medical office market. Services are migrating away from the acute care centers to more convenient outpatient centers Pollock tells GlobeSt.com. The costs associated with purchasing a MOB facility can vary widely and are influenced by many factors, such as whether the property is affiliated with a hospital or not. As with any investment, MOBs offer unique opportunities and considerations. Now in its 15th year, the HREI Resource Guide is the directory healthcare providers turn to when they need HRE professional services. Available office and lab real estate in Boston Q2 2022, by district and type The most important statistics Recommendations to buy, hold, or sell a retail property in the U.S. 2023, by city Our dedicated Investor Relations Team is standing by to help simplify your real estate investing process. Throughout his career, Jake has worked on over $40 Million in land deals and actively working on $300 Million in development projects (Multifamily, Hospitality, Storage, Retail, and Medical Office . At the very least, technology will continue to be vital to healthcare in 2022 and continue to grow and evolve. Moreover, leasing medical office properties can be more time-consuming and complex than leasing traditional office space. However, we should note that labor, inflation, and rising interest rates may present a few challenges. The Gateway Pundit previously reported that the Arizona Senate and House Elections Committees held a joint 3 Trends That Will Drive Real Estate in 2022 Key Takeaways From the Annual PwC, ULI Emerging Trends in Real Estate Report (Getty Images) If there are three words real estate professionals should consider heading into the next year, they are flexibility, convenience and resiliency. Although there were some surprises and overly negative forecasts surrounding retail and office commercial real estate markets, industrial continues to perform well. People have grown accustomed to receiving treatment and other healthcare services in a hospital-like setting. One of the first steps in demystifying the asset class is by looking at the trends that are impacting medical office investments, both past and present. These properties are built to be fully ADA compliant and will typically feature high-end finishes and aesthetics. Class A medical office buildings tend to be newer with modern-day layouts, systems, and amenities. Subscribe to our commercial real estate newsletter. Staff, who might otherwise be confined to an isolated office park, will be drawn to the convenience that retail environments offer as they can more easily pop out for lunch or to run errands on their breaks. Traditionally, they have been located on or near hospital campuses, given the referral patterns between physicians and affiliated hospitals. Atlanta and Chicago are tied for the greatest amount of medical office space under construction among the top ten metro areas, with both at 1.7 million square feet under construction. Related: Investors Must Think for Themselves. Additionally, tech like AI and drones may be a part of pharmaceutical production and delivery in the futureif not in 2022, then perhaps within a decade or two. Wealth Management is part of the Informa Connect Division of Informa PLC. Access the latest quarter commercial real estate results for the office sector nationally. As 2022 unfolds, medical professionals should strongly consider partnering with a healthcare real estate practice to offer guidance through the nuances of healthcare real estate trends. Infrastructure investments tend to directly benefit commercial properties located in the area via increased access, higher quality amenities and services, and enhanced desirability for employers and households, Calanog said. We focus our investments on net leased properties. During this same time, conventional office was down 40.2%, multifamily investment volume dropped 27.6%, retail declined 42.8% and industrial investment slipped by 15.9%. The REITs wellness infrastructure portfolio includes seniors housing, skilled nursing facilities, hospitals and medical office buildings. One source lists several health tech trends that will either emerge or continue in 2022. One Medical, whose parent is called 1Life Healthcare Inc., operates 182 medical offices in 25 markets in the United States. The pandemic aside, healthcare occupations are expected to be in high demand for years to come. Ambulatory outpatient care facilities have been at the center of Meridians focus for years and we expect this trend to continue to accelerate and translate into more opportunities for investors, developers, and providers alike., *May exclude premium content portfolio, Feature Story: HRE developers see plenty of opportunities in 2023, Feature Story: The top 10 healthcare real estate stories of 2022, Feature Story: Outpatient is the place to be as demand rises, Feature Story: Expert advice Be patient and proactive, Feature Story: The economy is taking its toll on HRE, for now, Feature Story: Behavioral health takes center stage, Feature Story: Lending lull in the HRE sector, News Release: Newmark Facilitates $72.7 Million Sale of Medical Office Building Portfolio, News Release: Grand Opening Planned For Highland Bridge Medical Office, News Release: Just Closed Union Park (Atlanta), News Release: Caddis Construction Groundbreaking Ceremony For New Class A Medical Office Building In Frisco, Texas, News Release: Medical Properties Trust, Inc. Reports Fourth Quarter and Full-year Results, News Release: Pantheon Expands Real Estate Strategy With Investment in Healthcare Platform; Adds Senior Hire to Real Estate Team, News Release: CBRE Group, Inc. Reports Financial Results for Q4 and Full Year 2022, News Release: Broadstone Net Lease Announces Fourth Quarter and Full Year 2022 Results, News Release: Newmark announces the successful closing of a $50.4 million financing secured for a national medical office building portfolio, News Release: Physicians Realty Trust Supplemental Q4 2022 financial report, News Release: Physicians Realty Trust Reports Fourth Quarter 2022 Financial Results, News Release: Sabra Reports Fourth Quarter 2022 Results, News Release: TCC and Beacon Capital Partners Begin Vertical Construction on Hyde Park Labs in Chicago, News Release: NNN Pro Group Leads the Way in 2022 with Record Setting $5.6 Billion in Net Lease Investment Sales, News Release: RX Health & Science Trust Enters Atlanta Market thru Acquisition of Union Park, News Release: Class A medical office building near Denver sells for $5.65M, News Release: Alexandria Real Estate Equities, Inc. Reports: 4Q22 and 2022 Net Income per Share Diluted of $0.31 and $3.18, respectively; and 4Q22 and 2022 FFO per Share Diluted, As Adjusted, of $2.14 and $8.42, respectively, News Release: Goldman Sachs Asset Management and Lane Partners Announce Recapitalization of Southline Phase I with Beacon Capital Partners, News Release: LTC Invests $51 million for Refinance of Seniors Housing Campus in Upscale Atlanta Area, News Release: First Citizens Bank Provides $50.3 Million Financing for Recapitalization of Medical Office Building Portfolio, News Release: A Joint Venture Between Onyx Equities And Machine Investment Group Acquires Two Million Sf Biologics Research And Development Campus In Kenilworth, N.J., From Merck Sharp & Dohme LLC With Plans To Continue Sites Current Use, News Release: Outpatient healthcare services and facilities set for enormous growth, Thought Leaders: JLL Healthcare Perspectives Capital Markets, Life Sciences: U.S. Life Sciences Real Estate Market Shifted in Q3 from White-Hot to Red Hot. This shows that despite economic swings, medical office rents are reliable. Feature Story: Health systems are hurting, Feature Story: The cloudy economy has a silver lining: higher cap rates, Life Sciences: Bellwether firm Alexandria delivers strong Q4 results, Feature Story: Another MOB sales record: $25 billion in 2022, Companies: Montecito is off to a fast start in 2023, News Release: 2022 HREI Insights Awards Finalists announced (UPDATED), Transactions: Woodside, Heitman recapitalize a 423,000 s.f. Revenue expectations for 2023 are mixed among those surveyed40% say revenues should increase, 48% see revenues decreasing, and 12% expect no change. Medical Office Real Estate Trends 2022 1. According to a recent CBRE analysis, although healthcare employment experienced a pandemic-induced dropoff in 2020, the decline (6.4% year-over-year) was much lower than employment losses for the broader economy (11.2%). Our portfolio includes medical, retail, industrial and office properties. The 2023-24 HREI Resource Guide is now accepting orders. One well-known trend that was already underway long before the pandemic is the rising proportion of patient care delivered in outpatient facilities. They may need significant capital improvements to remain competitive in the marketplace. She specializes in the marketing and sale of hospitals, surgical centers and healthcare properties including office, retail, industrial buildings and land. Given the lack of new construction, it is no surprise that MOB net absorption outpaced new supply across the nations top 50 metro areas last year. This development is just one factor guiding industry leaders to believe healthcare real estate is heading in a positive direction in 2022. Increasingly, MOBs are opening on retail pad sites located at larger mixed-use projects. We take pride in our long-term relationships and are committed to the highest level of service and ethical standards. REITs and vertically-integrated funds are among the most active buyers of medical office as they are less affected by the higher cost of We know firsthand from deals weve been working on that buyers have pulled back and lenders are more Investors ranging from private equity groups to 1031 exchange buyers to vets looking for a place to put their 2,000+ wealth management leaders. Developers are quickly converting some existing office spaces, but not every building is a good fit to include laboratory space. Alliance invests in commercial real estate across the US. This lack of new construction is helping to keep vacancies of existing facilities low and is driving MOB rents to all-time highs. Data from Revista, a medical property research platform, is similar with asking rents reported to be approximately $21.40 per square foot (NNN) for the properties in its database. Facebook Linkedin Twitter Youtube Instagram TikTok. In 2020, the average price per square foot rent for MOB buildings increased by a more substantial 5.5%, a factor attributed to limited supply. Transaction volume and investment activity are strong indicators about the prospects of any real estate asset class. This shows that despite economic swings, medical office rents are reliable. Medical professionals seeking assistance in buying, selling, or leasing healthcare real estate can trust our team to serve them to the best of our ability. By co-locating in a more traditional retail environment, healthcare providers gain greater visibility, better access, and branding opportunities that give them a competitive advantage over those located in more isolated suburban office parks. When considering a MOBs costs, an investor should look beyond just the purchase price. Office Space Real Estate Trends. The COVID-19 pandemic is continuing to affect office space real estate trends. For example, unlike traditional office users, medical office tenants often need highly specialized tenant fit-outs before committing to a long-term lease agreement. Like most asset classes, MOBs were adversely affected by the pandemic in 2020, although healthcare real estate was fairly stable and didn't experience the downturn seen by the office, retail and hospitality sectors. Weakening fundamentals and higher cost of capital will generally . Financial Results. Payment processing is provided by Dwolla, Inc. Investment advisory services are provided by EM Advisor, LLC, an investment advisor registered with the Securities and Exchange Commission. With decades of commercial real estate experience, we take pride in committing to meeting the goals of our Sellers, as we consistently and seamlessly adhere to successful closings. Of course, how (and how much) an investor wants to invest will undoubtedly guide their decision on which medical office building is best. Since 1995, Alliance Consolidated Group has acquired and invested in medical properties with net leases between $3 and $25 million across the United States. Updated infrastructure: An initiative to create and update infrastructure could enhance roads and bridges, which would help shorten commutes, enable quicker e-commerce last-mile deliveries and improve the economy. Nevertheless, for those willing to understand the sectors nuances, a medical office can be a tremendous addition to an investors portfolio. Equity Analyst, 360 Huntington Fund. Related: Is there more to investing than Making Money? Some regions, like New York and Los Angeles, have higher asking rents but these areas also have lower vacancy rates. So 2023 development and sales volume will [], FOR IMMEDIATE RELEASE The five assets total 179,000 square feet and span four states New York, NY (February 28, 2023) Newmark announces the $72.7 million sale of a fivebuilding, Class A medical office building portfolio. Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business. It is unclear how technology will impact the full scope of healthcare real estate in the future. As youll see, medical offices are on an upward trajectory and in turn, competition for these assets is on the rise. To subscribe, please click [], Announces $159.7 Million of 2022 Acquisitions and Investments Announces $0.05 Net Income per Share and $0.26 Normalized FFO per Share for the Fourth Quarter of 2022 Announces Weighted Average Leasing Spread of 7% on 140,000 of Renewed Square Feet in the Fourth Quarter of 2022 Fourth Quarter Highlights: Reported fourth quarter 2022 total revenue of [], IRVINE, Calif.(BUSINESS WIRE)Sabra Health Care REIT, Inc. (Sabra, the Company or we) (Nasdaq: SBRA) today announced its results of operations for the fourth quarter of 2022. Hong Kong Medical Office Building Development Opportunity. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service. Discover the latest numbers, news and market moves to know about each week with Ginger Chambless, Commercial Bankings Head of Research. Moving forward, keep an eye out for the pandemics lingering impacts, including: inflation, interest rate hikes, labor shortages and increased costs for construction materials. So whats a LSRE professional to do? Real estate and other alternative investments should only be part of your overall investment portfolio. Moreover, rents are now on the rise. In a recent survey, Tether Advisors found that on average, "Nearly 80 percent of private equity, commercial real estate and retail healthcare respondents believe MedTail investment will. Terms of Use Prepare for future growth with customized loan services, succession planning and capital for business equipment or technology. However, increasingly, there is demand for medical offices located in more suburban and rural areas as patients seek care closer to home. A medical office is a great option for risk-averse investors, given the industry's strong underlying fundamentals. There was a slight drop off in sales activity, with an average volume of $4-4.5 billion per quarter for most years. Office vacancies were at 12.6% mid-2020 vs 8.6% for MOB vacancies. Moving forward, its not unthinkable to have medical providers give patients pagers like they would get at a restaurant, which would allow patients to go run errands or do other shopping on-site while remaining close by. No other publication or website reaches healthcare real [], InterFace panelists say theres still a lot of capital flowing into the MOB space By John B. Mugford What a difference a year can make. Working from home was relatively rare for the workforce prior to the pandemic, but it quickly became popular and is expected to maintain momentum through the upcoming year. Collectively, our team has decades of experience, allowing us to provide our clients with the very best in advisor knowledge and expertise. Download this whitepaper to learn which top retail CRE brands are poised for big things in 2023. The new medical office building provides an opportunity to [], Posted in Breaking News, Outpatient Projects, Per Share Net Loss of ($0.24) and Normalized FFO of $0.43 in Fourth Quarter 35% Growth in Net Income and 4% Growth in Both NFFO and AFFO, on a Per Share Basis, in Full-Year 2022 BIRMINGHAM, Ala.(BUSINESS WIRE)Medical Properties Trust, Inc. (the Company or MPT) (NYSE: MPW) today announced financial and operating results for the [], Posted in Breaking News, Companies & People, REIT Report, Healthcare real estate platform created alongside Elliott Bay, a leading investor and manager of mission-critical healthcare facilities across the US Exclusive partnership will assemble a diversified portfolio of outpatient healthcare assets leased to leading specialty providers, hospitals, and health systems nationwide Marks the third real estate platform established by Pantheon since inception of its real [], GAAP EPS fell 21% for FY 2022 to $4.29 Core EPS rose 7% for FY 2022 to $5.69 DALLAS(BUSINESS WIRE)CBRE Group, Inc. (NYSE:CBRE) today reported financial results for the fourth quarter and year ended December 31, 2022. Vacancy decreased 150 bps year-over-year ending the third quarter at 11.4 percent with positive net absorption ending at 124,331 square feet. 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Relationships and are committed to the highest level of service and ethical standards of $ 4-4.5 per! Found in rural areas as patients seek care closer to home stable industries telehealth usage is 38 times than! Inflation, and rising interest rates may present a few challenges and insights than it been. Trends and opportunities square [ ] knowledge and expertise be fully ADA compliant and will typically feature high-end finishes aesthetics... Built to be fully ADA compliant and will typically feature high-end finishes and aesthetics skilled nursing,.