Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

Software company Kareo recently surveyed over 1,300 independent medical practices to gauge its outlook on the challenges and successes in the post-pandemic environment. The findings were interesting. The attitude of the surveyed practices is positive, with 75% of those surveyed reporting growth ahead; notably, only 59% predicted they’d grow in 2019. Additionally, over 50% of independent practices saw similar or even higher patient volumes in 2020 compared to 2019.

Many practices attribute this positive stance to the technology adopted across the industry. As discussed in our Spring 2021 newsletter, telehealth tec...

Commentary by: Chris Gordon, Senior Managing Director, Global Healthcare Services

In light of the pandemic, hospitals and health systems have had to reevaluate the standards and design of their healthcare facilities. While certain criteria such as welcoming, easy-to-navigate spaces will be mainstays of healthcare facilities, health systems must quickly identify design solutions to avoid some of the major challenges faced in the height of the pandemic.

One trend offering this solution is creating multipurpose spaces that can easily transition based on emergency situations—having the flexible infrastructure to run medical gas, for example, to different areas or to create negative pressure ...

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

Medical office building (MOB) transactions in the second quarter of 2021 were up 19% year-over-year. The market saw an increased focus on the property type, and as more opportunities were marketed, cap rates increased slightly from the first quarter of this year. The average cap rate was 6.5%, ten basis points lower than the second quarter of 2020 and very similar to the average cap rate in the second quarter of 2019. The tightening of the market drove the average price per square foot ($/PSF) to $331, which is the highest Q2 $/PSF in the past five years.

Three hundred and three MOB transactions closed in the quarter. T...

Commentary by: Eric Murphy, Managing Director, Global Healthcare Services

Healthcare merger and acquisition activity for the second quarter of 2021 followed similar trends to the first quarter, with fewer transactions announced. Still, the transaction revenue remains high and above the total transaction revenue for 2020. Kaufman Hall reported in its Healthcare Merger & Acquisition Activity Report: Q2 2021 that 14 transactions were announced in Q2 2021 with an average seller-size revenue of $604 million. While the number of transactions has been lower than pre-pandemic years, the average seller size is well above historical averages.

As previously reported in Newmark’s Global Healthcare S...

Commentary by: Eric Murphy, Managing Director, Global Healthcare Services

The first quarter healthcare mergers and acquisition transactions see a significantly large transaction size compared to last year's first quarter and one of the largest average seller sizes in the past ten years. Kaufman Hall reported in their Healthcare Merger & Acquisition Activity Report: Q1 2021 that the average seller size by revenue is $676M. The overall number of transactions for this first quarter is significantly less than last year, with 13 announced transactions for this quarter as compared to # for the same period last year. The small number of transactions is offset by the type of large transactions that h...

Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

One of the more recent topics within the healthcare industry is telehealth and its potential disruption of the healthcare real estate environment. I wanted to share my perspective and insights on this trend based on a career history and experience working within and around telehealth.

For the past three decades, changes within the healthcare industry have happened very slowly and deliberately. The pendulum of change would often swing back and forth, consistently resulting in a slow but steady change. With the arrival of COVID-19, the healthcare industry experienced change at warp speeds. Approvals for telehealth visit ...

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

Newmark represented the largest single property transaction for the quarter

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...

Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

In a report published earlier this month, Newmark’s Jimmy Hinton, Head of Investor Strategies, analyzed the recent rise in bond yields, which has been steadily increasing since November 2020. With February 2021 seeing the 10-year U.S. Treasury rise faster than any 30-day period in the past four years, it is evident that the steepened yield curve has several coming implications for commercial real estate and specifically the healthcare real estate sector.

How does this impact healthcare real estate?

Todd Perman, Vice Chairman for Global Healthcare Services advises providers and health systems, “Due to the ons...

With over $1.4 billion in U.S. MOB investment sales volume for 2020, Newmark leads top brokerages and captured a market share of more than 19%.

"As providers continue to experience an unprecedented capital markets environment focus on preserving capital post-COVID-19, we anticipate the continued use of third-party capital for development and growth. Evaluating capital sources and deciding to own or lease will also bolster volume and growth for the medical office sector in 2021." - Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

"COVID-19 certainly created a challenging transaction climate, but it also accelerated the allocation of capital to medical office real estate for invest...

Commentary by: Jessica Moore, Financial Analyst, Global Healthcare Services

One hundred and seventy four medical office building transactions closed in December 2020. Even though 13 states (including DC) were without a closing in the month of December, the transaction volume totaled $1.57 billion and over 3.58 million square feet.

The largest single property transaction was Healthcare Realty Trust’s acquisition of the Saddleback Valley Medical Center in Laguna Hills, CA. HRT acquired the 135,904-square-foot property for $84 million.

The largest portfolio transaction was the Welltower/Wafra portfolio consisting of 24 properties and totaling $550 million. The second largest transaction was ...