Medical office property prices dropped 5% in first half of 2009, according to the latest Marcus & Millichap report on US medical office real estate. According to the report, the national median price for medical office space dropped to $195 per square foot in the first half of 2009 as the transaction volume for assets under $10 million posted a decline of over 20%. As a result of the declining investment activity cap rates for medical office real estate climbed to the mid- to high-8% range.
Medical office space price trends varied across US regions in the first half of 2009 according to the Marcus & Millichap report. The highest median property price as of the first half of 2009 is reported for the California/Pacific Northwest region. According to the report, the median price in this region was $272 per square foot, and posted a 10% drop compared to year-end 2008.
The second highest median price of $194 per square foot is reported for the Southwest/Mountain region, where prices also dropped 10% in the first half of 2009.
The lowest medical office property price of $140 per square foot is reported for the Midwest. Finally, median prices of $180 and $175 per square foot are reported for the Northeast and Southeast, respectively.
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