Medical office has quietly become one of the tightest corners of U.S. commercial real estate, and fresh Cresa data provided exclusively to GlobeSt.com shows a small group of metros beginning to separate from the rest of the pack on rent, absorption and construction. For investors, the picture that emerges is one of a sector where national averages tell only part of the story and local dynamics increasingly determine pricing power and risk.
Pricing Power Narrows To A Few Markets
Across the country, asking rents for medical office space have cooled from the pace of the last few years, with average base rents rising less than 1 percent over the past 12 months, even as operating costs continue to climb. Yet a handful of markets are still commanding notable premiums, and in some cases, outsized rent growth.
On the pricing side, San Francisco, Miami and San Jose sit at the top, with Q1 2026 medical office asking rents of $51.04, $49.30 and $46.94 per square foot, respectively.
Los Angeles and New York City follow at $44.65 and $42.34, and San Diego, Seattle, Austin, Charlotte and Charleston complete the top tier, all in the mid‑30s to high‑30s per square foot range.
These are markets where location, demographics and the depth of local health systems are allowing landlords to hold firm on rents despite higher all‑in occupancy costs.
Rent growth paints a slightly different map. Orlando is the clear standout, posting 5.32 percent rent growth over the past year, far ahead of the national medical office average of 0.78 percent.
Dallas and Charleston come next at 2.35 percent and 2.24 percent, with Tampa at 2.03 percent and Denver at 1.69 percent. Las Vegas, Miami, Austin, Los Angeles and San Francisco all land in the 1 to 1.54 percent range.
The overlap between the high‑rent and high‑growth lists is limited—Miami and San Francisco appear on both—but the broader pattern is clear: coastal markets hold the highest face rents, while rent growth is strongest in a set of Sun Belt and Mountain metros where supply has lagged demand.
Demand Holds Up, Especially In The Sun Belt
Even with slower rent growth, demand for medical office space has remained solid. Nationally, the sector recorded 6.24 million square feet of net absorption over the past year and maintained an occupancy rate of 91.5 percent, well ahead of traditional office. Within that aggregate, however, a relatively short list of markets is doing much of the heavy lifting.
Houston is the most prominent example. It led the country with 847,074 square feet of net absorption in the past 12 months, a performance closely tied to its robust pipeline of new medical office deliveries.
Orlando followed with 390,339 square feet of net absorption, while Chicago, Phoenix and Dallas posted 318,880, 298,222 and 263,900 square feet, respectively.
Boston, Atlanta, Indianapolis, Las Vegas and Minneapolis rounded out the top ten absorption markets, each adding roughly 177,000 to 254,000 square feet of occupied space over the year.
The occupancy leaders form a different group and tilt toward smaller and mid‑size markets where new construction has stayed in check. Omaha currently reports the highest medical office occupancy in the country at 95.6 percent, followed closely by Charlotte at 95.5 percent and Seattle at 95.4 percent.
Charleston and Madison both post 94.3 percent occupancy, Cleveland stands at 94.2 percent and Indianapolis at 94.1 percent, while Miami, St. Louis and Nashville all sit above 93 percent.
These are not necessarily the markets commanding the highest rents or the fastest growth, but their tight occupancy suggests limited vacancy risk and room for incremental rent gains if supply remains disciplined.
Construction Stays Disciplined But Targeted
Cresa's numbers show that medical office deliveries have eased over the past two quarters, yet the overall pipeline remains active, particularly in Texas and in tertiary markets linked to large healthcare systems. Nationwide, roughly 10.48 million square feet of medical office space is under construction compared to 8.12 million square feet delivered over the last 12 months, indicating a market where new supply is being added but not aggressively.
Houston once again stands out in construction. It has delivered 897,829 square feet of medical office space in the past year and still has 257,849 square feet under construction. New York City has brought 549,435 square feet online, while Dallas, Orlando and Phoenix have added 481,610, 349,280 and 344,500 square feet, respectively.
Boston, Tampa, San Antonio, Nashville and San Jose also appear on the top‑ten list for deliveries, each with between about 230,000 and 311,000 square feet completed over the period.
The list of markets with the largest volumes currently under construction shows where developers expect demand to continue. Dallas has 671,588 square feet underway and Phoenix has 502,497 square feet in the ground.
Omaha, despite its smaller overall inventory, has 427,448 square feet under construction, while Indianapolis and New York City have 338,893 and 304,500 square feet under construction, respectively.
Cleveland, Philadelphia, Pittsburgh and Miami are each building between roughly 252,000 and 296,000 square feet. The result is a mix of large gateway metros and smaller healthcare hubs where developers appear to have conviction in future tenant demand.
Where New Supply Could Move The Needle
When construction is viewed as a share of existing inventory, the markets where new supply could meaningfully shift fundamentals become clearer. At the national level, the pipeline represents a modest fraction of the total medical office stock, but a few markets are well above that level.
Omaha is the most extreme case: space under construction equals 10.1 percent of its current inventory, by far the highest share in the country. San Francisco and Cleveland follow at 3.4 percent and 2.7 percent, while Phoenix's pipeline equals 2.1 percent of inventory and Dallas sits at 1.8 percent. Pittsburgh, Indianapolis, Miami, Charleston and Atlanta all fall in the 1.6 to 1.7 percent range.
A separate look at "active construction markets" tells a similar story, but with a Sun Belt accent. Orlando tops this list, with under‑construction space equal to 2.8 percent of inventory. San Jose follows at 2.4 percent and Houston at 2.0 percent, while Nashville, Austin and Tampa show construction of 1.8 percent, 1.7 percent and 1.7 percent of inventory.
San Antonio, Charleston, Phoenix and New York City round out the top tier with pipelines between 1.4 percent and 1.6 percent. In many of these markets—Orlando, Phoenix, Dallas, Tampa—elevated construction coincides with strong absorption and, in some cases, above‑trend rent growth, suggesting developers are largely following demonstrated demand rather than building speculatively.
Taken together, this latest cut of Cresa data suggests a medical office sector in which headline numbers mask a growing spread between markets. Rent growth has cooled, but high‑rent coastal metros, fast‑growing Sun Belt cities and health‑system‑anchored secondary markets are all playing distinct roles in the next phase of performance.
For investors who already know the asset class well, the opportunity now lies in reading that dispersion: identifying metros where tight occupancy and limited pipelines can support continued rent gains, and those where an active construction wave may test just how durable the demand story really is.
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