Medical Office Building (MOB)
A medical office building is a specialized commercial property housing healthcare providers — physician practices, outpatient surgery, diagnostics, specialty clinics — typically leased at higher rents and with longer leases than general office.
What it means
MOBs are a distinct CRE subsector. Tenants are healthcare providers who need specific build-outs (exam rooms, plumbing, power, accessibility features). Once built out, tenants rarely relocate — medical leases often run 10–15 years with credit guarantees from hospital systems or stable physician-group tenants.
MOB cap rates typically trade 50–100 bps tighter than comparable general office because of lease term, tenant stickiness, and durability of healthcare demand. On-campus MOBs (adjacent to hospital systems) trade tightest; suburban off-campus MOBs slightly wider. Major MOB investors include Healthpeak, Ventas, and Healthcare Trust of America.
Related terms
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