MOB Investment Rises, Cap Rates Fall

Executive Summary

• Medical outpatient building (MOB) investment volume rose by 78% year-over-year in Q1 to $2.9 billion, 15% above the five-year Q1 average and bringing the trailing-four-quarter total to $13.5 billion.
• The average MOB sale price of $310 per sq. ft. in Q1 was 55% more than the $200 per sq. ft. for traditional office buildings.
• The average MOB cap rate fell by 13 basis points (bps) year-over-year to 6.9%, the first time it has dropped below 7.0% since Q3 2024.
• Average MOB asking rent hit a record-high $25.40 per sq. ft. in Q1, up by 1.6% year-over-year.
• The sector had 511,000 sq. ft. of positive net absorption in Q1, its fourth consecutive quarter of positive demand.
• The 59 markets tracked by CBRE had a combined 2.9 million sq. ft. of space under construction as of Q1.