Montecito Medical Market Update

What factors should we consider in a decision to sell our group’s medical real estate?

And is now the right time?

Whether (and when) to sell your medical office building (MOB) are among the biggest decisions physicians make in their career. Right now, as institutional investors flock to medical properties, many physician groups are receiving inquiries from potential buyers — and considering their options.

For perspective from someone who has been in that position as an MOB owner, Montecito’s Mike Freiburg interviewed Dr. Mike Fabrizio of Urology of Virginia in this brief, informative video:

Key points from the conversation:

•    As MOBs have emerged as a premier category in commercial real estate, interest from institutional buyers is as high today as it has ever been.

•    Because of the distinctive nature of the business, medical offices continue to enjoy extremely high occupancy rates even as other categories of commercial office properties struggle.

•    The unusually large number of physicians retiring since the COVID-19 pandemic began creates challenges in many physician groups — along with opportunities for developing a new real estate strategy that serves the needs of younger partners.

•    The prospect of rising tax rates and rising interest rates, combined with high MOB valuations, is driving many groups to conclude that now is an opportune time to sell.