Healthcare Capital Markets 2025 Outlook

Opportunity in Asset Quality Many markets with high rent growth and strong occupancy are currently trading below their 8-year avg price PSF

Repositioning Opportunity

• In 2024, many markets with high occupancy and strong rent growth saw assets trade below pre-pandemic, price-psf averages. • Some of this pricing is a function of lower than-average deal activity and the quality mix of assets that traded. • With tight occupancy in many of these markets and as the cost to build new buildings continues to increase, opportunities to reposition some well-located class B assets may arise. • According to Revista, as of 3Q24 the median, new construction cost in a high occupancy market like Boston was $365 psf, not including tenant improvement (TI) allocations. Boston reported an average purchase price of $224 psf as of 4Q24 on a TTM basis. • The discount is much larger in San Francisco, where the median new build cost is $1,206 psf and the sales price is $271 psf.

$800

$700

$600

$500

$400

$300

$200

Sales Price PSF (TTM)

$100

$0

4Q2024 2020-2023 Avg 2016-2019 Avg

Source: RevistaMed, Cushman & Wakefield Research

*New York 2016-2019 Avg off chart: $1,661

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