In a move underscoring growing demand for medical office, Kayne Anderson Real Estate is set to close a $2.5 billion fund expected to spend approximately half of its money on the asset class, the Wall Street Journal reported this week, citing sources familiar with the fund.
While medical office buildings sales volume slowed in 2020, they performed better than most asset classes during the pandemic. A report from Colliers earlier this spring noted that MOB investment decreased 12.2% year-over-year in 2020 to hit $11.1 billion, while cap rates fell 20 basis points to 6.5%. But when compared to overall CRE, which posted a 32% decline in sales volume overall, those numbers look good.
"Cap rate stability reflects the continued desirability of healthcare as it became one of the most essential sectors in 2020," Colliers said in the report, noting that investors view MOB as safe and durable even in the face of economic shockwaves.
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