Report: Seattle Medical Office Market Tight
Rent increases in the Seattle medical office market are among the highest in the country thanks to the region’s tight availability. The medical office rent rate grew 7.1% from Q2 2017 to the same period in 2018. Rents now average $32.52/SF. Vacancy rates dropped 115 basis points to 4.7% over the same period.
“The Seattle market has seen increasing demand from consolidating health systems and independent providers, yet developers have been reluctant to build speculatively and users are reluctant to commit to properties not yet built,” CBRE Senior Vice President Paul Carr said in a statement. “As a result, the market continues to tighten, and rates continue to rise."
In Seattle, 72,652 SF of medical office construction deliveries came to market between Q3 2017 and Q2 2018. A total of 1.46M SF hit the market between 2010 and Q2 2018. Meanwhile, the market had 150K SF of medical office space under construction as of Q2 2018.
Nationally, the U.S. outpatient care center sector has boomed along with the price of rent. The U.S. average asking rent rose 1.4% year over year to $22.90/SF.
“Rents increased in two-thirds of the markets tracked by CBRE and grew fastest in some of the markets with the lowest vacancy rates, including Louisville, Seattle, Nashville, Manhattan and Indianapolis,” CBRE Americas Head of Office Research Andrea Cross said in a statement.
Between 2005 and 2016, the number of outpatient centers nationally grew more than 50% to approximately 41,000. At a growth rate of 3.5%, outpatient center employment has outpaced overall healthcare employment increases.
“Healthcare systems are increasingly catering to patients as consumers — rather than simply users — of healthcare services,” CBRE Executive Managing Director Healthcare Mark Lamp said. “They are creating outpatient facilities that provide a more ‘hotel-like’ experience — and at a lower cost than the more expensive hospital services — with technology-enabled check-in, abundant natural light and incorporated outdoor spaces, and patient care concierges trained to support guests with any needs.”
