Overall, 2016 was a year of expansion for health care real estate in the United States. The national vacancy rate for medical office buildings (MOB) hit an all-time low. Net absorption of MOB space was the highest since 2008 while average rents grew. Investment activity—while down slightly from 2015—remained strong and compressed capitalization rates slightly.
As 2017 gets underway, health care providers and health system owners are facing a variety of considerations that could impact their businesses and real estate strategies. Despite the uncertainty surrounding the Affordable Care Act and rising costs in every facet of the industry, health care real estate fundamentals remain solid and the industry will likely remain buoyed by consumer demand.