NEWMARK KNIGHT FRANK

GLOBAL HEALTHCARE SERVICES WRAPS UP THE YEAR WITH AN OVERVIEW ON HEALTHCARE CAPITAL MARKETS

Written by GHS team member Garth Hogan

The Newmark Knight Frank Global Healthcare services national team, had its biggest year of volume since the formation of the group nearly 4 years ago and project a significant increase in 2016. The demand for new and more efficient clinical space as well as the reallocation of capital on both the provider and investor side has stimulated most of this activity. The healthcare capital markets continue to show signs of strength ahead of an expected interest rate hike by the Fed and headwinds from the selloff in healthcare REIT stocks. MOB sale transactions for 2015 are on track to outpace 2014’s record-setting volume of $9.879 billion (RCA). Q3 ’15 closed with over $2.535 billion (RCA) in MOB transactions totaling $8.727 billion YTD. While transaction volume remains high, cap rates appear to have plateaued. The average MOB cap rate for Q3 ’15 was 7.18%, a 4 basis point increase from Q2 ’15 and a 9 basis point increase from Q1 ’15. The below graph compares MOB historical sales volume and cap rate trends (RCA).

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