Record-setting. That’s the best description of the medical office market in 2017.
JLL recently released a snapshot of this sector, and reported that the sales of medical office building through the third quarter of the year are on pace to break the all-time record of $9 billion set in 2015.
According to JLL, the country saw $7.1 billion in medical office sales through the third quarter. With an entire quarter left to go? It’s almost certain that medical office sales will break past that $9 billion reached in 2015.
Large portfolio sales helped fuel this pace, with JLL saying that these sales contributed to more than half the volume. Four of these portfolios totaled $3.6 billion: Duke Realty healthcare, the MB Real Estate recapitalization and the Dignity Health and Harrison Street portfolios.
And this is just the beginning, according to JLL. The company said that the medical office building sales we are seeing now are only “the tip of the iceberg.” This makes sense if you consider that the total medical office building market has a value of $363 billion. This means that less than 2 percent of this market is trading now on an annual basis.
If medical office building sales did come into line with the typical standard of 8 percent to 9 percent annual turnover in traditional sectors, the medical office building transaction volume would quadruple.
