Medical office tenants are seeking rent relief from their landlords today, but a portion of healthcare real estate stakeholders see today’s crisis as an opportunity to invest in much-needed infrastructure for tomorrow. That’s according to the results of a new COVID-19 impact survey for owners, managers, agents and investors in medical real estate recently conducted by Revista, owner of the nation’s most authoritative medical buildings database.
The survey of medical real estate stakeholders took place April 13 through 17, 2020. One survey measured Covid-19 impacts on leasing and a second one measured the pandemic’s potential impact on the medical real estate investing environment. Of the responses received, most landlords and agents (90%) are seeing leasing slow significantly but renewals (for 65%) holding steady. About a third (32%) of those medical tenants are seeking rent relief, pushing a growing contingent of landlords (65%) to consider rent deferral programs on a case by case basis.
While most specialties are seeing some impact on their businesses, dental, followed closely by vision/ophthalmology and dermatology practices report a greater impact than their counterparts in other care areas.
So what does this mean for future of MOB investments? Of those healthcare real estate investors surveyed, 50% predict that cap rates will move 25-50 basis points over the next 12 months. Thirty percent see cap rates moving closer to 50-100 basis points. That’s tempting 38% of survey respondents to watch the market closely as a potential opportunity for future investments.
To see the full survey results, click here.