MINNETONKA, MN-In recent years, healthcare real estate (HRE) professionals here in the United States have been waiting to see if the amount of foreign capital invested in domestic medical office buildings (MOBs) would continue to rise.

For a time, it seemed as if that would indeed be the case. For example, in 2011 cross-border buyers acquired a total of a $365 million worth of medical office buildings (a figure that includes only transactions of $2.5 million or more), according to statistics supplied by real estate research firm Real Capital Analytics Inc. In that year, foreign investment represented about 8.7 percent of the total MOB sales volume nationwide, which according to RCA came in at about $4.2 billion.

Yet despite the seemingly rising interest from cross-border investors, foreign investments fell dramatically in 2012, dropping to $83 million – out of a total MOB sales volume of $3.13 billion.

The significant drop has continued into 2013. According to RCA's figures for the first two quarters, foreign capital spent just $21 million on healthcare real estate. That amount is represented by just one transaction: Vancouver, BC-based Talia Jevan Properties' purchase of the 81,875 square foot Lifeprint Health Center in Phoenix in Q2.

Keeping the 2013 foreign capital investment figures low is the absence of purchases so far by ProMed Properties, a wholly owned subsidiary of Tel Aviv, Israel-based Gazit-Globe and the most active foreign buyer in recent years. In 2011, ProMed spent $143 million on two large medical transactions in Boston and Manhattan before making another $21.75 million acquisition in Baltimore in late 2012.

As noted, the most-active year so far for foreign buyers remains 2011. Following closely behind ProMed that year was Bahrain-based Investcorp. The company acquired $67 million worth of MOBs in 2011 in two deals and, like a number of other foreign investors who entered the market that year, has not returned since. That's year's other foreign investors were from the U.K., Sweden and Canada.

Conventional wisdom says that foreign investors are perhaps waiting for pricing to ease up in a currently frenzied US healthcare real estate sales market. Perhaps they are unwilling to enter a market where demand for high-quality, health system-affiliated MOBs far outpaces supply. According to numerous sources, record amounts of capital have been raised by a number of MOB investors, including non-listed real estate investment trusts, who are eager to place their capital.

Of course only time will tell if foreign buyers will have more of an impact on the market. And besides, just a few significant acquisitions by one or two foreign investors in the $20 million to $50 million range, which typically seems to be their target, could turn the low foreign investment numbers around in a hurry.

John B. Mugford is the Editor of Healthcare Real Estate Insights™, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.