Demand for medical space remains strong in major U.S. cities despite population shifts and rising rental rates

graph of percent of total population change from 2013 to 2023, percent increase of population aged 65 and older, percent change in average rental rate from 2019 to 2024, and MOB occupancy change from 2019 to 2024 in New York City, Chicago, Los Angeles, and Houston
  • Population changes can significantly affect healthcare providers, but in the largest U.S cities, the supply of medical space is so limited that, even with resident departures, demand for healthcare facilities remains strong.
  • In the four largest U.S. cities by population, all except Houston have faced overall population declines over the past decade. However, average rental rates for medical outpatient facilities have risen by over 20% in New York City and 15% in Chicago over the past five years. Occupancy rates have stayed above 90% in all cities, except Houston, with rental rates continuing to rise across the board.
  • This suggests that landlords may have some advantages in New York, Chicago, and Los Angeles, while tenants in Houston can enjoy more options and lower rates.

January 27, 2025

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