This article was originally published in the May/June 2016 issue of REIT magazine and has been republished with the magazine’s permission.

Shifting dynamics in healthcare services are driving healthcare REITs to the doctor — or the doctor’s office, at least. While less than 15 percent of the more than $350 billion worth of medical office buildings (MOBs) in the United States are owned by REITs, the property sector is increasingly attracting investors looking for a stable asset to offset some of the operating issues confronting healthcare REITs.

“Healthcare REITs were under a bit of duress in 2015 because of concern about oversupply in the senior housing sector, reimbursement for Medicare and Medicaid patients, and a reduced ability to raise capital,” says Jordan Sadler, managing director at KeyBanc Capital Markets. In effect, MOBs provide a safety valve for healthcare REITs.

Scott Estes, CFO of Welltower Inc., adds: “Healthcare