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.