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Despite Appeal for Risk-Averse Investors, Medical Offices Also Come With Caveats

Medical Offices Seen as Hedge Against Recessions for Third-Party Investors

The Garland Building is advertising 10 office condos, many of which are medical, for sale in the Central Loop, at an average 7.5% capitalization rate. (Benjamin Gonzales/CoStar)
The Garland Building is advertising 10 office condos, many of which are medical, for sale in the Central Loop, at an average 7.5% capitalization rate. (Benjamin Gonzales/CoStar)

Over more than two decades, medical offices were frequently bought by third-party investors as a hedge against recessions. Over the past 10 years, though, that trend has largely abated for multitenanted medical office sales transactions, only gaining traction within the single tenant occupancy, or STO, property type.

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