Medical Office Premium Calculator

Medical office trades at lower cap rates than general office.

Property NOI

General office cap %

MOB cap %

MOB premium

$2,777,778

MOB value

$17,777,778

General office value

$15,000,000

How the math works

Office value = NOI / office cap. MOB value = NOI / MOB cap. Premium = MOB − office.

$1.2M / 8% = $15M office vs $1.2M / 6.75% = $17.8M MOB = $2.8M MOB premium.

How to Use

Enter property NOI.
Enter general office cap %.
Enter MOB cap %.
Read MOB premium.

Frequently Asked Questions

Why MOB premium?

Mission-critical tenants (hospitals, practices). Long-term leases (10-20 years). Strong credit (healthcare systems). Essential use during downturns. Aging population demand. Cap rates 50-150 bps lower than general office.

Typical cap rates?

General office 2024: 7-9%. MOB: 6-7.5%. On-campus MOB: 5.5-6.5%. Off-campus specialty: 6.5-7.5%. Ambulatory surgery center: 6-7%. Each category has distinct market pricing.

Construction premium?

MOB construction 20-40% more expensive than office (medical gas, high-grade HVAC, specialty plumbing, power). Return on higher cost through rent premium and cap compression — generally justifies premium.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.