Medical outpatient building absorption reached 3.8 million square feet during the first quarter, a 71% year-over-year surge that pushed occupancy to 92.5% across the top 50 markets.
According to the 2026 Vital Signs report from Cushman & Wakefield (NYSE: CWK), this sector’s activity was fueled by healthcare spending, which has grown 5.8% annually over the past decade.
Furthermore, limited new supply and strong tenant demand generated upward pressure on rents. Average rents across the top 50 markets reached $26.64 per square foot, increasing 1.9% year-over-year. At the same time, construction activity declined 10% year-over-year and represents just 2.2% of existing inventory.
The picture is further enhanced by investors circling this sector. Investment sales totaled $1.8 billion in the first quarter, up 36% year-over-year, with rolling four-quarter volume reaching $9.8 billion, a 49% increase. Cap rates have stabilized around 6.7% as total returns outperformed other real estate sectors, supported by strong income returns and long-term stability.
“Medical outpatient buildings continue to demonstrate resilience and long-term appeal,” said Lorie Damon, executive managing director of the healthcare advisory practice at Cushman & Wakefield. “With healthcare delivery rapidly shifting toward outpatient settings and new construction lagging, we’re seeing sustained occupancy gains and consistent investor interest across both core and secondary markets.”
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