Secondary U.S. metros ripe for more medical office development

Overall medical office occupancy in the 100 largest U.S. markets has had an uptick in Q2 2023 over Q2 2022 from 91.9% to 92.6%. Markets with population sizes of 500,000-1,000,000 have experienced the most dramatic increases in occupancy.
Although there has been significant delivery of new medical office square footage in these “secondary” markets, the absorption rate has far outpaced the new square footage delivery rate.
Even with robust additional square footage in development, occupancy rates in these markets will remain above the national average, likely driving increased rental rates and additional MOB development.

July 28, 2023