Commentary by: Eric Murphy, Managing Director, Global Healthcare Services
Medical Office Building (MOB) sales saw a flurry of transactions during the third quarter of 2021, with a 103% increase in transaction volume compared to the third quarter of 2020. Year-to-date transaction volume through the third quarter has also increased by 13% compared to the first three quarters of 2020. With more investors entering the MOB space, third-quarter cap rates compressed to 6.2%. The tightening market drove the average price per square foot ($/SF) to $377—the highest it has been in the past five years.
The third quarter of 2021 saw the third-highest quarterly volume over the past five years, as 437 MOB properties closed during the quarter. States with the most third-quarter activity included California, Georgia, and Texas, which made up for 33% of the total transaction volume. The largest single MOB property transaction was 153 Townsend Street in San Francisco, which sold to Ellis Partners for $231 million, or $1,375 per square foot.
Current Conditions
Average Cap Rate – 6.2%
Average Deal Size – $10.0M
Average Price Per SF - $377
Largest 3Q21 MOB Sales Transactions
Source: RCA
