MOB Sector Boasts High NOI Growth, Occupancy
The medical office building (MOB) sector is performing at close to cyclical highs in terms of NOI growth and occupancy, according to the first-ever “Revista MOB Sector Fundamentals Report” from health care real estate group Revista.
The report is based on data from major owners of medical office properties who collectively own 150 million square feet of medical office space. Revista collects the data quarterly, encompassing a portfolio, as well as on a same-store, year-over-year basis.
As of the second quarter of 2016, the sector’s average occupancy rate rang in at 92.5%. The median occupancy rate change, year-over-year on a same-store basis, was 25 basis points. Same-store, year-over-year NOI growth totaled 3.0% as of June 30, 2016, and revenue growth is trending near a cyclical high at 2.3% year-over-year, the report shows.
Revista also recently published its “Mid-Year 2016 U.S. Medical Real Estate Construction Report,” which reveals national construction statistics and trends on MOBs and hospitals.
The MOB and hospital construction pipeline is growing, the report shows. The total U.S. medical real estate construction pipeline currently stands at $102.1 billion, a 5.1% jump from the $97.1 billion at year-end 2015. The total pipeline includes all MOB and hospital construction projects that are in progress or in late planning, are valued in excess of $5 million, and are expanding by at least 7,500 square feet.
The level of MOB and hospital construction, compared to existing square footage or inventory, is also increasing, the report shows. As of mid-year 2016, the construction vs. inventory metric was 5.6%. This represents a 4.8% jump from the figure at year-end 2015.
Written by Mary Kate Nelson