Vital Signs Fall 2021: Healthcare and Medical Office Report

MEDICAL OFFICE ROLLING 4-QUARTER CAP RATES VS. COST OF DEBT

10%

8%

6.2% vs. 6.4% in March 2020

6%

4%

3.7% vs. 4.1%

2%

266 bps vs. 207 bps

0%

(2%)

Spread Cap Rate Cost of Debt

Source: RCA, Cushman & Wakefield Research (Includes refinancings)

SENIOR HOUSING SECTOR, CHALLENGED BUT IMPROVING

Senior housing as a sector—and consequently its unit absorption—struggled significantly as a result of COVID-19. In the early days of the pandemic, senior housing centers experienced high infection rates, as their patient populations were among the most susceptible to the virus. All types of senior housing—independent living, assisted living, skilled nursing, and CCRCs—have seen a decline in occupancy since the start of the pandemic, though occupancy levels across asset types are

improving with widespread resident vaccination. UNIT ABSORPTION BY PRODUCT TYPE

-60,000 -50,000 -40,000 -30,000 -20,000 -10,000 0 10,000

Independent Living

Assisted Living

Continuing Care/Life Plan

Nursing Care

Source: NIC MAP

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