2019 Healthcare Marketplace Report

by | 04 March 2019

Investors Remain Bullish as Technology, Consumerization and Mergers Further Transform the Healthcare Landscape

We are pleased to share Colliers International’s 2019 Healthcare Marketplace Report, which shows that the U.S. healthcare real estate sector remains on solid footing. The national vacancy rate for medical office buildings (MOBs) held virtually flat after 2017’s all-time low, even though 20.9 million square feet of new medical office space was delivered in 2018. Pricing and capitalization rates (cap rates) held firm in 2018, while MOB rental growth in 2018 was the highest on record.

Key Takeaways

  • Vacancy: Following 2017’s cyclical low, national MOB vacancy essentially remained flat in 2018, with a marginal
    increase of 10 basis points to 8.2%.
  • Absorption: Demand for medical office space remains strong and is keeping pace with new supply being added.
  • Rents: National full-service gross MOB rents increased by 3.6% in 2018, significantly higher than the historic annual average of 0.2%.
  • Construction: Following 18.8 million square feet of MOB deliveries in 2017, the 2018 total rose to 20.9 million square feet. MOB construction remains heavily weighted toward off-campus projects.
  • Sales: Total investment in MOBs fell from $14.5 billion in 2017 to $12.7 billion in 2018, though transaction volumes continue to be restrained by the small universe of investable product. Meanwhile, average cap rates held steady at 6.7%.

For more details, download Colliers International’s 2019 Healthcare Marketplace Report.