- At 9.7%, vacancy rate is at lowest point since second-half 2006
- New construction—both on-campus and off-campus—has increased to meet growing demand
- Healthcare systems continue to execute their strategic plans in preparation of healthcare reform
- Continued consolidations and mergers of Twin Cities’ healthcare organizations are occurring, which has real estate implications
The Twin Cities multi-tenant medical office market continues showing strong vital signs and proving itself to be a strong asset class. The sector reported new pockets of leasing activity and increasing new development. Although quoted net rental rates were flat, landlords of well-positioned, well-maintained properties saw improvement in overall economics as the market continues to tighten.
Overall vacancy is 9.7%—the lowest since second-half 2006. Many on-campus or healthcare system-sponsored facilities are essentially full with eight hospital campuses reporting zero vacancy. Absorption in 2012 totaled 164,340 sf. Medical office space continues outperforming the general office market, which has a vacancy rate of 18%.
To read more, visit the January 2013 edition of Cushman & Wakefield/NorthMarq’s Compass report, now available online. Visit the web site: www.northmarqcompass.com