RealEstateJournal | Medical Offices Prove To Be a Healthy Asset

From a recent Wall Street Journal article, it is clear that the Medical Office Building investments are getting a lot of interest:

"The recent focus on Medical Office Buildings has caused capitalization rates, or the return on investment during the first year of ownership, to compress, just as it has with other property types. Mr. Anderson says that MOBs have become increasingly expensive relative to historic pricing. "The cap rate for a good-quality MOB is well into the 6% range, whereas the cap rate for a good-quality traditional office building can be below 5," adds Mr. Anderson.

You can read the entore article here:

RealEstateJournal | Medical Offices Prove To Be a Healthy Asset

I know someone who turned around a medical office building with success a year or so ago. And I am sure that once it is turned, there is a huge market for especially the bigger ones. But this is a reminder to me that when insurance companies and other big investors are in a sector of real estate, the prices can be driven up making great deals harder to come by in that sector... A reminder to understand your market and stick with it.