U.S. Medical Office Buildings: A Cure for Market Volatility

CBRE presents its first-ever report on the U.S. medical-office market and its potential as a real estate investment to weather any economic downturn based on a combination of demographic trends, technological advances and an emphasis on cost-efficiency. Key findings of our report include:

  • The 65+ population, which currently accounts for the highest per-capita health care spending by far, will nearly double by 2055.
  • Cost containment is driving health care industry consolidation and fueling demand for less expensive delivery settings, such as medical office buildings and urgent-care facilities, as well as new technologies that can produce better patient outcomes at lower costs.
  • Absorption of medical office space has outpaced new supply for the past seven years, lowering the segment’s national vacancy rate to 8% as of Q1 2017.
  • Rising investor confidence in medical office space has resulted in increased transaction volume in the segment, which reached nearly $10 billion for the year ending Q1 2017 and pushed cap rates to a record-low average of 6.8%.

To learn more about how the medical-office market is becoming increasingly appealing to investors, please download the full report, or for more information contact CBRE’s Healthcare Real Estate Services or CBRE’s U.S. Healthcare Capital Markets Group.