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Top 5 Markets Boasting Strongest MOB Demand

The top five markets with the highest net absorption of medical office space are located in the Sunbelt, according to CBRE’s 2017 Medical Office and Health Care Report. Robust population growth is driving demand for medical office space.

The top markets are:

1. Tampa—602,000 sf
2. Houston—469,000 sf
3. South Florida—424,000 sf
4. Las Vegas—418,000 sf
5. Atlanta—402,000 sf

“Medical office space that helps providers minimize costs and maximize outcomes, including buildings that support collaboration and can accommodate new technologies that help them achieve these goals, will likely remain in favor,” said Jim Hayden, executive managing director, Healthcare, Global Workplace Solutions, CBRE.

Nationally, net absorption has been positive on a quarterly basis since at least Q12010, and has picked up substantially in recent years.

From 2010 to 2015, net absorption totaled 59.3 million sf, slightly exceeding completions of 54.1 million. However, in mid-2015, net absorption began to outpace deliveries. Between 2015 and Q1 2017, net absorption totaled 35.4 million sf, 38% higher than completions of 25.6 million during the same period.

On a yearly basis, net absorption has been increasing since 2011, when it totaled 8.1 million sf. Since then, net absorption has grown by 114%, to 17.2 million sf in 2016.

Strong healthcare employment growth is an important demand driver for medical office space in these markets. The total number of healthcare-related jobs increased by 3.4% or more in 2016, and 10% or more since 2011 in each.

For questions, comments or concerns, please contact Jennifer Duell Popovec

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