JLL’s Valuation Advisory group released its first-ever Healthcare Investor Survey & Trends Outlook, which provides insight into the healthcare capital market and investor priorities for 2023. Their key finding: Transaction volume is expected to increase in 2023. Here, we share highlights from the report and the reasoning behind the anticipated growth.
Transaction Volume
Medical office transaction volume was uncertain and unsteady in 2022 and Q1 of 2023 because of rising interest rates, particularly for single occupancy sales. However, investors expect medical office transaction volume and pricing to stabilize in the remainder of 2023.
This is due to several factors:
- Resilient occupancy has been standing above 90% since the end of 2022;
- There has been both steady rent and NOI growth;
- Telehealth has declined by 10%, with almost 90% of office visits now taking place in person (compared to a high of 54% during the height of the pandemic);
- Medical office tenants provide stable occupancy because high costs to build space persist; and
- Medical office rent continues to increase each year at an average of 2.29%.
To read the full report, click here.
Source: https://www.us.jll.com/en/newsroom/transaction-volume-expected-to-pick-up-in-2023