Medical office buildings (MOBs) continue to be a stabilizing force in commercial real estate as the healthcare industry undergoes rapid transformation, driven by evolving patient needs, technological advances, workforce pressures and financial constraints, according to a Colliers report.
The growth of outpatient and ambulatory care is fueling demand for surgery centers, urgent care facilities and specialty clinics. At the same time, digital health and AI adoption are expanding rapidly, supporting operational efficiency and clinical decision-making, the report noted.
Against this backdrop, MOB demand continues to outpace supply. Since 2021, the top 50 U.S. markets have seen demand exceed new MOB supply by 3.1 million square feet, while the top 100 markets show a shortfall of 4.7 million square feet. Providers are expanding into strategic, high-growth outpatient locations while consolidating older space, Colliers said.
MOB vacancy remains low, ranging from 7.5% to 7.7%, with average occupancy reaching 92.5% in 2025. Long-term leases, operational requirements, and "sticky" tenancy help maintain stability, even as broader commercial real estate markets face uncertainty. Steadily declining vacancy rates reflect strong healthcare demand, limited new supply and favorable long-term demographic trends.
MOB vacancy has remained lower and more stable than traditional office markets from 2018 to 2025, according to Colliers. Limited availability challenges providers seeking to upgrade or expand their space, putting further pressure on them to consider alternatives, such as investing in existing assets.
Average rents have climbed to $26.35 per square foot in the top 50 markets and $25.79 in the top 100 markets, representing a 17–18% increase since 2018. High-quality, well-located outpatient properties remain highly sought after, reflecting competition among providers for modern, patient-centric space. Several interconnected forces are driving this steady rise in medical office rents, with demographic pressure among the largest factors. The aging U.S. population is significantly increasing demand for healthcare services and outpatient facilities.
Healthcare real estate investment totaled $10.6 billion in 2025, with continued interest in Class A, on-campus and high-acuity outpatient assets. Private equity, institutional investors and operators are leveraging creative structures, including joint ventures and recapitalizations, to fund growth while maintaining operational flexibility, the report said.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.