Despite the challenging conditions experienced by healthcare real estate (HRE) developers in 2022, primarily driven by escalating construction expenses and inflationary pressures, the sector witnessed a marginal decline of only 1.1 percent in the commencement or completion of medical outpatient building (MOB) space compared to the preceding year.
The revelation emerged as a surprise when Revista, a research firm headquartered in Arnold, Md., unveiled its 2023 Outpatient Real Estate Development Report. The report indicated that in 2022, the aggregate volume of MOB projects initiated or finalized amounted to 44.9 million square feet, slightly lower than the 45.4 million square feet recorded in 2021.
However, the challenges intensified in 2023, as mounting costs, escalating interest rates, tighter access to financing, and the financial strains faced by healthcare systems began to impact MOB development endeavors.
According to the latest findings from Revista’s 2024 Outpatient Real Estate Development Report, released this week, the total MOB space initiated or completed in 2023 witnessed a significant decline of 30.5 percent. The figures plummeted from the previously mentioned 44.9 million square feet to 31.2 million square feet last year.
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