Abundant Capital in Medical Office CRE

PHOENIX—Mergers within the healthcare industry, along with the aging population are factoring into the medical capital markets equation. As for the latter, convenience will be increasingly critical for medical providers as the 65-plus age cohort, which dominates physician’s office visits, increases by 17 million people during the next 10 years. These trends have generated consistent demand for single- and multi-tenant buildings as well as facilities that can be economically converted to easy-access locations, according to a Marcus & Millichap medical office report.

Many owners are quickly capitalizing on higher asset values and selling properties to exchange into other commercial assets type while interest rates remain historically low. Numerous factors impact market pricing for these assets including the location of the property, the financial standing of the lessees, the specialty practice of the tenant, and regional economic and demographic trends, says the report.