Houston &# 8217; s Clinical Office complex Market Slows yet Fundamentals Remain Steady
Key Takeaways
- Positive absorption continues
- Tenancy improves
- New deliveries drop
- Building up
Houston Crowd Highlights
Task in Houston’s clinical office complex (MOB) market reduced in the first half of 2025, with internet absorption of 342, 580 SF down 40 1 % compared to the second fifty percent of 2024 and down 60 4 % from the very same time last year. Nevertheless, the occupancy rate rose 60 basis points to 89 8 % from the 2nd fifty percent of 2024 and is additionally up from 88 6 % year over year. Distributions dropped to 90, 532 SF from the 936, 633 SF completed in the first half of 2024 Houston-area construction stayed No. 3 in the top 50 Crowds nationally for square footage underway, enhancing to 1 2 M SF from 984, 727 SF year over year. Asking rental fees remain to climb up, with the typical asking NNN rental price now at $ 24 15 PSF, up from $ 23 70 at year-end 2024 and $ 23 27 at mid-year 2024
Executive Summary
Houston’s medical office building (CROWD) market continues to be a foundation of the city’s health care landscape, fueled by robust need and continual institutional and exclusive investment.
Solid leasing task has actually kept pace with new distributions, pushing occupancy greater both quarter over quarter and year over year. Over the previous 12 months, occupancy rose 120 basis indicate 89 8 %, sustained by both a positive web absorption of 342, 580 square feet– outpacing the 90, 532 square feet of new distributions– and a growing building pipeline.
RevistaMed, a national medical residential property data source service provider, reveals Houston keeping its No. 3 placing for crowd square video footage incomplete amongst the Top 50 markets and placed at the No. 4 place for year-over-year web absorption.
Key advancements driving growth
Growth continues to be secured by calculated growths from significant health center systems and medical groups, both on- and off-campus.
- University of Texas MD Anderson Cancer Cells Facility — The largest task to begin in 2025 is a 470, 000 -squarefoot facility in Sugar Land, readied to open up in 2029 This will certainly be MD Anderson’s largest Houston-area area to day, including an ambulatory surgery center, expanded analysis imaging, radiation oncology, outpatient step-by-step solutions, and multidisciplinary clinics to sustain comprehensive cancer treatment.
- Kelsey-Seybold — 2 new clinics are underway: a 51, 871 -square-foot center at 11225 W. Grand Parkway S. near the Aliana neighborhood in Richmond, and a 119, 682 -square-foot Northwest School Hub at 19926 Northwest Highway. Both are slated for conclusion in 2025 Kelsey-Seybold also introduced prepare for an additional facility in the Fort Bend Community Facility task in Missouri City.
- Houston Methodist — 3 jobs remain in progression, consisting of two in collaboration with Legacy Area Wellness: a 40, 000 -square-foot facility in Pasadena to be finished October 2025 and a 26, 200 -square-foot facility in Acres Houses to be completed in 2026 Furthermore, a 65, 000 -square-foot detailed care facility has been announced to be constructed in Cinco Ranch.
- Memorial Hermann — This hospital group is increasing its Cypress university with a 100, 000 -square-feet building and including 135, 466 square feet in its 5th structure in The Woodlands. A 51, 000 -square-foot MOB/freestanding ER in Bridgeland is likewise underway, targeted for conclusion in 2026
Houston MOB Sales Task
Medical Office Building sales task slows down in 2025
The first fifty percent of 2025 highlights a moving financial investment landscape for Houston’s clinical office building (CROWD) industry– one noted by minimized offer flow, pricing pressure and discerning investor task– yet still anchored by considerable trades in prime locations.
MOB financial investment activity slowed down with both the number of deals and total sales volume decreasing from the speed set in 2024 The very first half of 2025 tape-recorded simply 18 sales completing $ 113 3 million, standing for a 53 2 % drop from the 26 sales worth $ 242 4 million shut during the same duration in 2024 When gauged against the 2nd fifty percent of 2024– when 22 sales produced $ 266 5 million– the existing total amounts reflect a 57 5 % decrease in buck volume, underscoring the market’s cooling momentum.
Prices fads further show this pullback. The ordinary list prices per square foot resolved at $ 170 in the very first half of 2025, falling 34 4 % from the $ 259 average recorded at the end of 2024, and down 46 7 % below the $ 319 ordinary just one year previously.
While pricing retreated, capitalization rates changed and ranged in between 6 5 % and 7 4 % during the previous 18 months. This motion reflects both transforming financier view and more comprehensive capital market changes.
Regardless of the overall slowdown, numerous transactions signified continued demand for top quality properties. Among the most remarkable:
- Lonza Houston obtained Pearland Kirby Medical Plaza, a three-story, 44, 579 -square-foot facility at 15015 Kirby Drive in Pearland. The global biopharmaceutical manufacturer also showed its long-term commitment to the area by restoring its 276, 770 -square-foot lease at 14905 Kirby in late 2024
- Medical care Real estate Count on sold Cypress Station Medical Structure, a 52, 040 -square-foot, three-story home at 1140 Cypress Station Drive, which was obtained by a private investor.
- Funding Real estate Team increased its Houston impact with the acquisition of Houston Medical Facility, a 10 -tale, 126, 906 -square-foot building at 6655 Travis Street, also bought from Health care Realty Count On.
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The message Houston Medical Workplace Record|Mid-Year 2025 appeared initially on Coy Davidson – The Occupant Expert