Jun 21, 2023

Commercial real estate services company CBRE recently released their report on the state of the real estate market in 1Q23: here

The report largely confirmed things Alliance has been seeing in the market, and writing about in our newsletters. But there were some interesting highlights for our MOB investors.

The Challenging (for overall real estate lending market):

  • CBRE’s lending index fell 353.5% year-over-year in Q1
  • Commercial loan spreads widened by 14 basis points (bps) to 206
  • Mortgage rates, loan constants and cap rates all rose in Q1
  • ​​U.S. commercial real estate investment volume fell by 57% year-over-year in Q1

The Intriguing (for MOB investors):

  • ​​Institutional and cross-border investors were net buyers in Q1, while private investors and REITs were net sellers
  • The average net-lease cap rate increased by 20 basis points quarter-over-quarter to 5.8%
  • The U.S. retail availability rate reached a new low of 4.8% in Q1, down by 50 basis points (bps) from a year ago
  • For retail, rent growth in Q1 remained above the 10-year average

None of these market insights is all that surprising, but it is helpful metrics for the state of the market.

While the CBRE survey shows wider spreads, fewer transactions, and higher cap rates more broadly, not every sector is being affected equally.


As we have discussed in recent newsletters, the Medical Office Building (MOB) sector has performed substantially better than other types of commercial real estate.

Alliance’s specialization in MOB continues to help us outperform, regardless of market conditions.

We have a variety of ways we add value. Our ability to manage complex or difficult deals, address vacancy risk in the case of a short lease, and handle other situations that scare off less sophisticated buyers gives us a big advantage.

And of course, our deep expertise in the highly resilient MOB sector positions us well to thrive, regardless of lending conditions or cap rates.

There are always opportunities out there and we’re going to find them.

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