Medical Office Research Brief

Medical office vacancy stable in three-year span. The medical office sector continues to exhibit resilience to pandemic-related disruptions. From 2019 through the first quarter of 2023, vacancy in medical office properties has only risen 50 basis points nationally. The sector has been bolstered by the necessary nature of medical office visits, as well as the expectation that healthcare demand will rise long-term with the ever-aging population. At the same time, less than 12 million square feet of medical office space was slated for 2023 delivery as of June — only 1.0 percent of current inventory — making near-term supply headwinds unlikely. Still, performance in sector fundamentals varies based on location-specific factors, such as resident demographics, existing local stock and metro-level construction pipelines.