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New Healthcare Joint Venture Secures $300M Pipeline

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The types of projects that will be supported include orthopedic centers, medical outpatient buildings, and inpatient rehabilitation facilities that will be developed across five undisclosed states.

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Rising Rates, Costs Catch Up With The MOB Development Market

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Although 2022 was generally considered to be a tough year for healthcare real estate developers – the result of rising construction costs and inflation – the amount of medical outpatient building space started or completed fell only 1.1 percent from the previous year.

That was indeed a bit of a surprise last year when the Arnold, Md.-based research firm Revista issued its 2023 Outpatient Real Estate Development Report, which indicated that the volume of MOB projects started or completed in 2022 totaled 44.9 million square feet in 2022, down slightly from the 45.4 million square feet of space started or completed in 2021.

However, it looks as if increasing costs, rising interest rates, harder-to-obtain debt and financially challenged health systems caught up with the MOB development business in 2023.

The newly released 2024 Outpatient Real Estate Development Report provides a wealth of information on medical office and other outpatient properties started and completed in 2023 by third party developers. The report provides a ranking of total number of projects, total square feet and total construction value for the top developers.

 

Source: HREI

Healthcare Realty Trust Announces $338 Million Of Fourth Quarter 2023 Asset Sales

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Healthcare Realty Trust Incorporated just announced the completion of $338 million of asset sales during the fourth quarter of 2023 bringing full year additional dispositions to $656 million at an average cap rate of 6.6%.

The full year additional dispositions resulted in proceeds of $597 million as well as $59 million of seller financing across three transactions, including $14 million of seller financing in the fourth quarter. Proceeds were used for general corporate purposes, including the funding of development commitments and repayment of debt. Healthcare Realty had no outstanding balance on its revolving credit facility as of December 31, 2023.

The 2023 additional dispositions of $656 million do not include the $112.5 million of asset sales in January 2023 that fully repaid the July 2022 merger-related special dividend.

Healthcare Realty is a real estate investment trust that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty’s portfolio includes more than 700 properties totaling over 40 million square feet concentrated in 15 growth markets.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2022 under the heading “Risk Factors,” and as updated in its Quarterly Reports on Form 10-Q filed thereafter. Forward-looking statements represent the company’s judgment as of the date of this release. Healthcare Realty disclaims any obligation to update forward-looking statements.

 

Source: HREI