GLOBAL HEALTHCARE SERVICES

NEWMARK

$1.6M in MOB Transactions Closed in First Quarter 2021

$1.6B in MOB Transactions Closed in First Quarter of 2021*

Newmark represented the largest single property transaction for the quarter

Commentary by: Mohsin Azmi, Associate Director, Global Healthcare Services

Medical office building (MOB) transactions in the first quarter of 2021 were down 58% year-over-year; however, the market saw an increased focus on the property type, and cap rates tightened across all acuity types. The average cap rate was 6.4%, ten basis points lower than the first quarter of 2020 and 40 basis points lower than the average cap rate in the first quarter of 2019. The increased focus also lifted the average price per square foot ($/PSF) to a level unseen in the past eight years.

Two hundred and fifteen MOB transactions closed in the first quarter of 2021, at an average value of $360/SF and a 6.4% capitalization rate. The largest single property transaction was LaSalle’s acquisition of 9033 Wilshire Blvd in Beverly Hills, CA. LaSalle acquired the property from UBS Realty for $74.4 million, or approximately $1,500/SF. Newmark’s Kevin Shannon, Rob Hannan and Ken White represented the seller in the transaction. Newmark also represented the seller, BentallGreenOak, in the sale of 147 Milk Street in Boston, MA, which closed at nearly $48 million or approximately at $900 per square foot. Both of these transactions demonstrated the highest price per square foot paid for an MOB in recent history according to preliminary data from Real Capital Analytics.

Overall, although transaction volume was down this quarter, increased capital allocations to the medical office building property type drove cap rates lower and values higher.

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Source: Real Capital Analytics preliminary data, as of May 3rd, 2021

Note: *Updated title from $1.6M to $1.6B.

All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient's choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of Newmark, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains. This document is intended for informational purposes only and none of the content is intended to advise or otherwise recommend a specific strategy. It is not to be relied upon in any way to predict market movement, investment in securities, transactions, investment strategies or any other matter.

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