MOB Cap Rates Continue Compressing

MINNETONKA, MN-For professionals involved in selling, or investing in, medical office buildings, learning where capitalization rates are how – and where they’re heading — is important. Knowing such information can help buyers and sellers prepare for transactions involving income-producing buildings, as the cap rate is typically used to set the return on an investment by using a property’s net operating income, value, and, in some instances, other factors. As most people in the business know, the lower the cap rate the higher the demand for such properties, meaning returns will also be lower.

When it comes to MOBs, however, investors are often willing to accept lower cap rates in return for a steady income stream.