Vital Signs 2022

VITAL SIGNS

Medical Office Buildings: Capital Markets Update Despite costs of capital generally increasing and investors being more cautious when it comes to acquisitions, the number of total transactions in 2022 has remained strong as medical office buildings are seen as safe-haven asset types for investors to reallocate their portfolios. As predicted in Vital Signs 2021, volumes continued to increase into 2022. At face value, the transaction volume of Q3 2022 was more than 30% higher

as well as leasing and property management services to over 30 million square feet in the United States. Removing this merger and the associated commercial real estate acquisitions, the total sales volume during Q3 2022 was $2.6 billion, or a nearly 50% drop from Q3 2021. The impact of rising interest rates and the inability of medical office buildings to keep pace with inflationary expense growth will continue to have a cooling effect on transaction volumes going forward into Q4 2022 and the new year. However, this is a temporary and recoverable impact as inflationary pressures lessen. Q1 and Q2 volumes were markedly higher than their 2021 counterparts, as the impact of inflation and interest rates had not yet fully impacted capital markets.

than in Q3 2021, at $7.2 billion as compared to $5 billion. This increase was heavily influenced by the merger of Healthcare Trust of America (HTA) and Healthcare Realty Trust (HRT) in July 2022. The merger resulted in a combined entity with over 700 healthcare real estate properties totaling approximately 44 million square feet,

Medical Office Buildings: Transaction Volume by Quarter ($B)

$12 B

$10 B

$8 B

$6 B

$4 B

$2 B

$ B

2017 Q1

2021 Q1

2015 Q1

2018 Q1

2019 Q1

2016 Q1

2022 Q1

2017 Q3

2021 Q3

2015 Q3

2018 Q3

2019 Q3

2016 Q3

2020 Q1

2022 Q3

2020 Q3

MOB Hospital

Source: Revista Med, Cushman & Wakefield Research

VITAL SIGNS 2022: PERSPECTIVES ON HEALTHCARE AND MEDICAL OFFICE BUILDINGS