The Medical Office Market Shows Signs of a Thaw

Like most other asset classes, medical office properties have seen a dramatic decline in revenue during the pandemic. As a result, many tenants have either decided to hold off on expansion plans or have opted for short-term renewals during the pandemic. However, the market is starting to thaw as tenants and owners adjust to this new normal.

“Since most of our tenants need to see their patients in order to generate revenue, the initial shelter-in-place orders had a direct and dramatic impact on many of their bottom lines,” R.J. Sommerdyke, VP of acquisitions at Meridian, tells GlobeSt.com. “As such, many providers who may have previously been looking for a new location or expansion have opted for short-term renewals to conserve resources and buy time to reassess their business plans. With that said, we have seen activity and tour volume increase on all our assets over the past month, which is a good sign that tenants are regaining confidence and making plans for the future.”