Investors have discovered that no real estate sector is immune from the volatility in the debt market, even the normally stable medical office building category. Year-to-date sales volume for medical office centers is down about 62%. The average deal year-to-date in 2023 is about $9.6 million. Smaller deals continue to get done but not as many portfolio transactions are occurring as have normally taken place in a given year, according to CBRE's Chris Bodnar, Vice Chair and Head of Healthcare Advisory, Americas. 

Simply put, the fewer numbers aren't because there's less demand but because of limited availability of debt at the higher price points, without a lender needing to syndicate the debt on their side, Bodnar said. 

Also, the cost of debt here is not unusual, but similar to what's happening in other real estate sectors, he said. In the last quarter, cap rates for medical office centers averaged about 7.1%, the highest they've been in the last seven years.