U.S. Medical Outpatient Building Sector Continues Strong Growth Amid Rising Demand And Limited Supply

The U.S. medical outpatient building (MOB) sector continues to demonstrate strong fundamentals, supported by growing healthcare demand, demographic shifts and the ongoing migration of care delivery to outpatient settings.

According to the latest Cushman & Wakefield 2026 Vital Signs Report, demand continues to significantly outpace supply across the sector. In the first quarter of 2026, MOB absorption reached 3.8 million square feet, a 71% increase year-over-year, helping drive occupancy rates to 92.5% across the nation’s top 50 markets.

Healthcare spending growth and an aging population remain key drivers of demand. The U.S. population aged 65 and older is expected to increase by nearly 11 million over the next decade, fueling the need for accessible, cost-effective outpatient care. At the same time, healthcare providers continue shifting procedures and services away from hospitals and into community-based outpatient facilities.

This trend is expected to continue, with physician and clinical services spending projected to grow 8.2% annually through 2033, outpacing spending growth for hospital-based care.

Rents Increase As New Development Remains Limited

Strong tenant demand and constrained construction activity are contributing to rising rental rates. Average asking rents across the top 50 U.S. markets reached $26.64 per square foot, up 1.9% from a year earlier.

Growth has been especially notable in suburban and Sun Belt markets, including Florida, North Carolina and Texas, where population growth and retiree migration are accelerating demand for outpatient healthcare facilities.

Meanwhile, development activity remains subdued. Construction volume declined 10% year-over-year and represents only 2.2% of existing inventory, reinforcing a persistent supply-demand imbalance.

Investment Activity Gains Momentum

Investor interest in medical outpatient assets remains strong. Investment sales totaled $1.8 billion during the first quarter of 2026, a 36% increase from the prior year, while rolling four-quarter transaction volume reached $9.8 billion, up 49%.

Cap rates have stabilized at approximately 6.7%, and MOB properties continue to outperform many other real estate sectors due to their stable income streams, high occupancy levels and long-term demand drivers.

With healthcare delivery continuing to shift toward outpatient settings and new supply remaining limited, the sector appears well-positioned for sustained growth throughout 2026 and beyond.

For more, read the report here.

Source: Stock Titan