| Marcus & Millichap has good news and bad news for the medical office sector. The bad: During the past 12 months, sales velocity contracted 28%, and the median price slipped 11% to $167/SF nationwide and dropped 5% to $195/SF in Texas. The good: Activity stabilized in the first half of the year after the passage of healthcare legislation and will likely accelerate in the coming months. Cap rates average in the high-7 to low-8% range, similar to levels from one year ago, but low-vacancy assets or buildings in primary markets are seeing better. Institutions drove investment activity in the first two quarters of the year, but look for private buyers stepping up during the second half, especially with financing available and affordable by historical standards. |
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