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Bergen County
482 Medical Buildings
9,314,024 SF
RBA
$25.68 PSF
Base Rent |
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Essex County
327
Medical Buildings
5,610,576 SF
RBA
$24.15 PSF
Base Rent |
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Hudson County
191 Medical Buildings
2,351,236 SF RBA
$24.74 PSF Base Rent |
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Middlesex County
497 Medical Buildings
8,090,269 SF RBA
$22.80 PSF Base Rent |
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Northern NJ
3,357 Medical Buildings
59,941,778 SF RBA
$22.34 PSF Base Rent |
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SALES
34,599 SF | $13,500,000 315 E Northfield Road, Livingston, NJ Buyer: Richard Basch Seller: EMMR LTD Partnership
31,680 SF | $9,025,820 574 Springfield Avenue, Westfield, NJ Buyer: TopMed Realty Seller: Westfield Medical Props LLC |
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LEASES
14,021 SF 650 From Road Paramus, NJ
5,967 SF 2 Saddle Road Cedar Knolls, NJ
5,739 SF 310 Madison Avenue Morristown, NJ |
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Many factors are shaping the state’s healthcare system, especially
since the global pandemic. While the Biden administration officially
ended the COVID-19-related national and public health emergencies in
2023, New Jersey’s healthcare systems haven’t returned to a pre-2020
status quo. Here’s why:
Patients are more ill. A 2023 analysis by the Center for Health Analytics, Research, and
Transformation (CHART) at the NJ Hospital Association found a 21%
increase in “major” or “extreme” levels of illness—more than 40%
today—than in 2019.
The population is aging. According to the U.S. Census Bureau, between 2010 and 2022, the
65+ age group increased by over 35%. The state’s Department of
Labor predicts this demographic will grow by nearly 69% between
2012 and 2032.
NJ Hospital Association President and CEO Cathy Bennett said, “As
the Baby Boomers age, the profile of today’s hospital patient is sicker
and older. New Jersey is home to nationally recognized hospitals, but
our care teams are challenged like never before, caring for patients
whose needs are incredibly complex.”
The workforce remains strained. Among those populations affected by aging? The workforce—including
nurses, a profession with a high proportion of employees in the 56-
65 age group, according to the New Jersey Collaborating Center for
Nursing (NJCCN).
Demand for mental health services is soaring.
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By the Numbers
According to a 2024 report from the NJ Department of Labor & Workforce
Development (DOL):
- Hospitals account for 38% of healthcare employment.
- Nursing and residential care facilities account for 17% of healthcare
employment.
- Ambulatory healthcare services account for 51% of healthcare
employment.
The
According to several reports, nationally, MOB investment increased 60%
QoQ in Q2 to $2.5 billion, with sale prices averaging $291 per square
foot—a $3 increase from Q1 and 49% higher than the average traditional
office building price.
The average MOB cap rate fell to 6.9% (10 bps QoQ), the first quarterly
decline since Q2 2022. In Q2, net absorption of 2.2 million square feet
increased the trailing-four-quarter total to 4.8 million square feet.
Here are the Q3 statistics for New Jersey: - YTD statistics
- 12 transactions
- 3 sales and 9 leases
- Average rent: $28.54 PSF
- Average lease term: 6 years
- Amount of square footage leased or sold: 44,588 SF
Bergen County - 482 medical buildings
- 9,314,024 SF RBA
- $25.68 PSF base rent
Essex County - 327 medical buildings
- 5,610,576 SF RBA
- $24.15 PSF base rent
Middlesex County - 497 medical buildings
- 8,090,269 SF RBA
- $22.80 PSF base rent
Hudson County - 191 medical buildings
- 2,351,236 SF RBA
- $24.74 PSF base rent
Northern NJ - 3,357 medical buildings
- 59,941,778 SF
- $22.34 PSF base rent
- The next opportunity in healthcare real estate
Also, the shift toward outpatient care has benefited medical office
buildings (MOBs). As hospitals face increasing pressure to reduce
costs and improve efficiency, they’re outsourcing many procedures to
outpatient settings.
Before the 50 BPR cut, high interest rates influenced CRE prices,
including a decline in MOB costs, presenting a unique opportunity
for investors. Experts believe that the long-term fundamentals for this
sector remain strong, between increasing demand for outpatient care
and a limited supply of new MOBs driving future growth.
Healthcare real estate investment trusts (REITs) generate revenue via
rents collected from healthcare tenants leasing space in medical office
buildings, senior living facilities, even hospitals, and other healthcare-related
real estate properties. Investing in a healthcare REIT reduces
risk while facilitating a reliable cash flow and higher ROI as demand for
healthcare services grows.
As the premier healthcare advisory team in New Jersey, Team
Lizzack-Horning is here to guide you through every step of your real
estate journey. Whether you’re expanding, relocating, or investing,
our expertise can make a difference. Contact us to schedule a free
consultation today, and let us help you achieve your goals. |
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Teterboro, NJ | 201 488 5800 Parsippany, NJ | 973 463 1011 |
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