Medical Outpatient Buildings (MOBs) are among the most resilient and attractive real estate investment landscape sectors.  MOBs provide stability, predictable cash flows, and substantial growth potential in a rapidly evolving investment climate.  Our 40-year commitment to the sector has created irreplaceable insight into these trends and has helped shape our tenant-centric approach to development and investments in MOB. 

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Consider these well-known tenets of MOB:

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• Sticky Tenant Base: Physicians, hospitals, and other healthcare providers tend to stay in one location for extended periods.

  • High Capital Expenditure: Medical practitioners often invest significantly in their premises, from specialized medical equipment to tailored fit-outs. These capital investments make relocating both cumbersome and expensive.

  • Patient Familiarity: Relocating can risk alienating an established patient base. Patients become accustomed to visiting a specific location, and a change might disrupt the patient-doctor relationship.

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• Recession-Resistant Demand: The demand for healthcare services is relatively inelastic. Regardless of economic conditions, people will always need medical attention.

  • Recent research has emphasized that MOBs fared better during economic downturns than other real estate asset classes. This resilience is due to the non-cyclical nature of healthcare demand.

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• Demographic Tailwinds: With an aging global population, especially in developed countries, there's a rising demand for healthcare services.

  • Research reports linked on this website indicate that as the baby boomer generation ages, there will be an increased demand for various medical services, leading to growth in the medical office leasing market.

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• Attractive Lease Structures: MOBs often benefit from longer lease terms than other commercial real estate assets.

  • Longer lease terms provide stable and predictable cash flows for investors. In addition, healthcare providers prefer extended leases to maintain continuity of care for their patients.  They are also usually NNN and have annual rent escalations. 

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• Diversification Benefits: Investing in MOBs allows investors to diversify their portfolios, reducing exposure to more volatile market segments.

  • According to several research papers*, MOBs showed lower volatility and correlation to the broader real estate market, offering a hedge against market fluctuations.

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In conclusion, medical outpatient buildings are not just a haven for investors; they are a growth-oriented asset class bolstered by demographic shifts, sticky tenant dynamics, and a consistently high demand for healthcare services. Our experience, confirmed by insights from major brokerage firms specializing in these assets, further validates the strong performance and resilience of MOBs, making them an excellent choice for investors seeking stable returns and long-term appreciation. Investing in MOBs is not merely capital preservation; it's a strategic move towards sustainable growth.

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*all references to reports or research papers can be found in the News and Media section of this website.