Medical office buildings are having a moment, with investors flocking to the sector as a more stable alternative to suburban office holdings. Rents are at record highs, deal flow is strong, and demand is outpacing supply amid tight vacancy rates and stable cap rates.

The fundamentals are solid—especially when compared to the office sector as a whole. According to Colliers, average rents for medical office buildings ticked up to $22.61 per square foot in 2021, a year-over-year increase of 1.7% and a new high for the sector. The national vacancy rate fell by 10 basis points to 8.3%—a metric that’s especially positive when viewed against the broader office vacancy rate of 14.8% in 2021—and net absorption across the top 100 markets totaled 19.1 million square feet last year.


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.