Medical Building

Distortions in a Segment of the Commercial Office Market: The Case of Medical Office Buildings

June 2, 2022 - Smith, C. Brent, and Goodman, C. Allen

Citation: Smith, C. Brent, and Goodman, C. Allen, “Distortions in a Segment of the Commercial Office Market: the Case of Medical Office Buildings” The Journal of Property Research (2020)

Research Summary:
This article examines the U.S. market for medical office buildings and finds that the supply is constrained in states that have Certificate-of-Need (CON) laws, which place constraints on capital expenditures in healthcare at the state level. Although there is no language specifically limiting medical office buildings (MOBS), in states with CON laws the MOB rent and sales price premiums over similar office buildings are consistently higher.