Rent Growth Concentrates In Secondary MOB Markets Amid Tight Supply

Secondary medical outpatient building (MOB) markets are gaining momentum as limited supply and uneven demand patterns fuel rent growth.

Although national MOB rents have remained mostly flat over the past four years—rising just 0.1% in Q1—performance varies widely by market. Thirteen metros posted year-over-year rent increases above 5%, with some exceeding 7%.

This growth is especially pronounced in secondary, expansion-focused markets like Reno, Salt Lake City, and Nashville, which rank among the top performers. Other high-growth regions—including Atlanta, Austin, Tampa/St. Petersburg, Orange County, Orlando, and Raleigh/Durham—also continue to see steady rent increases, supported by solid demand and consistent absorption.

A key driver behind this trend is strong healthcare sector growth. Healthcare accounted for about 69% of U.S. job creation in January, led by ambulatory services, while medical office–using employment is projected to grow 5.5% in 2026.

Meanwhile, supply remains constrained across much of the market. National vacancy held at 6%, staying below five-year averages in most tracked markets. Even in active development hubs like Dallas, Miami, Phoenix, San Francisco, and Los Angeles, over 88% of new space is already pre-leased—limiting near-term increases in vacancy.

This imbalance between demand and supply is tightening leasing conditions, particularly in secondary markets where inventory is limited and development pipelines are smaller. Markets such as San Diego, Seattle, Northern Virginia, and Salt Lake City continue to operate below historical vacancy levels, while others—including San Antonio, Washington, D.C., Boston, and Suburban Maryland—remain above trend.

Overall, more than 60% of tracked markets recorded positive net absorption over the past year. However, only a few—such as Dallas, Houston, Orange County, and Jacksonville—posted gains exceeding 100,000 square feet. Vacancy trends further underscore tightening conditions, especially in several Sun Belt markets where vacancy remains below average despite ongoing construction.

Source: GlobeSt.