Costs and Tech Boost Demand for MOB

Biolife Plasma’s building of 14,654 square feet sold in the second half of 2017.

HOUSTON—The US Census Bureau estimates that the 65-plus population will nearly double between 2015 and 2055 to more than 92 million and comprise nearly 23% of the country’s total population by that time. The aging US population, pressure for healthcare providers to cut costs and new technologies have boosted demand for medical office properties in recent years, according to CBRE.

The overall US medical office building vacancy rate was 8% in first quarter 2017, down by nearly 300 basis points from first quarter 2010 and significantly below the vacancy rate for the US office market overall (13% in first quarter 2017). The pace of vacancy rate decrease accelerated in recent quarters due to stronger user demand, likely driven by the aging US population and increase in the ranks of the insured. The national vacancy rate decreased by the same amount during the past nine quarters (140 basis points) as during the prior four years, despite a slight increase in new medical office supply during the past few years, says CBRE.