Record Rents Support MOB Market Stability

Executive Summary

• Medical outpatient building (MOB) investment volume increased by 24% year-over-year in Q2 to $2.7 billion, 11% above the five-year Q2 average and bringing the trailing-four-quarter total to $14.4 billion.
• The average MOB sale price of $307 per sq. ft. was 57% higher than the $196 average for traditional office buildings.
• Average MOB cap rates remained relatively stable, rising by just 4 basis points (bps) year-over-year to 7.1%.
• The average MOB asking rent increased by 1.3% year-over-year to a record high of $25.46 per sq. ft.
• The sector had 1.18 million sq. ft. of net absorption in Q2, its fifth consecutive quarter of positive demand.
• The 59 markets tracked by CBRE had a combined 2.7 million sq. ft. of space under construction as of Q2.