Medical Office Building M&A Activity Decreases 23% in Q3:23, According to Data from LevinPro HC

NEW CANAAN, Conn., Oct. 10, 2023 /PRNewswire-PRWeb/ — Merger and acquisition activity in the Medical Office Building (MOB) sector decreased by 23% in Q3:23 compared with the previous quarter, with 44 publicly announced transactions, according to data captured in LevinPro HC. Additionally, the third quarter of 2023 saw a 27% drop in M&A activity compared with the year-ago quarter when 60 MOB acquisitions were announced.

“Healthcare real estate M&A has been rising steadily over the past several years, but it seems to have hit a slowdown in this most recent quarter,” said Avery Swett, an analyst at LevinPro HC. “Instability in the capital markets, in addition to the higher interest rates, has hampered the MOB M&A market in the last year, causing deal activity and dollar volume to both significantly decline.”

Announced spending in the third quarter decreased by approximately 49% from $380.6 million in Q2:23 to $194.7 million in Q3:23. The largest MOB deal by disclosed price was Sila Realty Trust’s acquisition of a 104,912-square-foot MOB in Burr Ridge, Illinois for $59.95 million.

In Q3:23, a few select states saw a significant concentration of M&A activity in the MOB sector, as per data collected by LevinPro HC. Among these states, Tennessee recorded the highest number of transactions with six deals, accounting for 13.6% of the total. Following close behind was Arizona with four deals and New York with three.

The busiest acquirer in the MOB market during Q3:23 was Montecito Medical Real Estate, with 10 deals, encompassing 162,780 square feet across the United States. Montecito Medical’s largest transaction of the quarter was the acquisition of a 21,000-square-foot MOB in Bartlett, Tennessee, for $48 million. The second busiest acquirer in the MOB sector was a joint venture between Sendero Capital and Angelo Gordon & Company, with three acquisitions. Additionally, Harrison Street and Four Corners Property Trust each announced two transactions during the quarter.

“Right now, there is a lot of uncertainty surrounding the healthcare real estate and lending market in 2024,” continued Swett. “Much of its future performance will depend on the Federal Reserve and how it handles the eventual decline in interest rates.”

Check out our most recent whitepaper here, written by Healthcare Editor Dylan Sammut, to learn more about recent trends in the healthcare real estate and lending market.

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of LevinPro HC. For information, or to order the reports, call 800-248-1668. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut, and North Bethesda, Maryland. The company publishes research reports and newsletters and maintains databases on the healthcare and senior housing M&A markets.