New Jersey Healthcare 1Q 2024 Report

Northern NJ


Medical Buildings

52,900,086 SF


$22.24 PSF

Base Rent

Bergen County


Medical Buildings

7,958,746 SF


$24.91 PSF

Base Rent




11,800 SF | $3,300,000

385 Morris Avenue, Springfield, NJ

Buyer:  Atlantic Health Systems

Seller:  MAK Associates, LLC 

8,226 SF | $3,250,000

79 Union Street, Montclair, NJ

Buyer: Anthonya D Silva

Seller: Fullerton-Union Property, LLC


12,807 SF

556 Eagle Rock Avenue

Roseland, NJ

9,020 SF

630 Broad Street

Carlstadt, NJ

6,204 SF

1455 Broad Street

Bloomfield, NJ

Healthcare Office Space


Healthcare remains a bright spot in the single-tenant office market, with steady demand for medical offices and urgent care centers. Labs for research and development supporting healthcare may also see ongoing crossover demand. However, while healthcare office space remains a hot property type, the trend isn’t extending to traditional office spaces in high-rises, suburban parks, or corporate campuses. 

Medical outpatient buildings remain a hot commodity in CRE. Their stability and the ongoing need for healthcare make them a prime investment opportunity. Diversifying investment portfolios with these assets can yield robust returns in the coming years.

By the Numbers
On-campus medical office buildings (MOBs) fetch higher prices than off-campus ones, with a typical premium of 25 basis points on cap rates. Rising interest rates have driven MOB cap rates higher, but with the Fed expected to cut rates this year, many investors are using lower exit cap rates when valuing MOBs. 

In one recent survey, half of investors expect exit rates to be 25-50 basis points higher than the initial cap rate, while the other half expects a smaller spread of 0-25 basis points. Discount rates, however, are expected to climb further, with respondents anticipating a spread of 75-100 basis points above the exit cap rate.

By the end of Q1 2024, these were Bergen County and Northern NJ numbers, with rents increasing a few pennies per square foot. 

Bergen County 
• 470 medical buildings 
• 7,958,746 SF RBA 
• $23.91 PSF base rent 

Northern NJ 
• 3,273 medical buildings 
• 52,900,086 SF RBA 
• $22.24 PSF base rent 

According to Forbes, the MOB market is booming, with a projected annual growth rate of 10.4% through 2027. Located in convenient medical corridors, MOBs offer top-notch facilities and easy patient access, a significant advantage over traditional hospital campuses. Also fueling MOB market growth? A shift in patient preference prioritizing convenience over the more traditional visits — and attempts to navigate — sprawling hospital campuses.

Looking Ahead to 2024
The Federal Open Market Committee predicted during its December 2023 meeting that the Fed will cut interest rates three times in 2024, bringing the federal funds rate down to 4.6% by year-end. However, some experts caution that high interest rates in healthcare real estate may linger. While this scenario creates a wait-and-see approach for pricing and financing, interest rates should stabilize. With physician retirements outpacing new graduates, labor shortages remain a concern, however.

The outlook isn’t all gloomy. Experts point to a boom in mental healthcare clinics and project the market will grow at a 3.5% CAGR through 2029. As societal attitudes shift and demand increases, these facilities are attracting significant investment.

Darren M. Lizzack, MSRE

(201) 906-4376

Teterboro, NJ | 201 488 5800

Parsippany, NJ | 973 463 1011