New medical facilities drive increasingly high rents in top U.S. metros, widening MOB rental rate gap

New, high-quality medical outpatient buildings (MOBs) in the top 100 U.S. metros have higher rental costs compared to more typical medical properties, which follow normal rental rate growth patterns. The top 10% base rents for medical outpatient facilities has reached $39.00 per square foot (psf), while the 50th percentile base rent is $24.00 psf.
This has caused the gap between the 50th percentile and 90th percentile for all asking base rental rates to grow by 7.8% since the first quarter of 2019. This gap also caused NNN asking rental rates to grow by 13.8% during the same time.
Other major factors that are driving up MOB rental rates across the nation include higher construction costs and tenant demand for better build quality in new construction.

November 11, 2024