Off the charts! Houston’s healthcare pulse strong, mid-year 2016

Demonstrating why landlords may want to call their property “medical,” in first quarter 2016, over 116,000 sf of medical office space was absorbed—and because of the need for that kind of space, over 2 million sf of medical office space is currently under construction.

Adding to the new development of medical office space, most of the major hospital systems in Houston are building, remodeling and expanding their campuses, particularly in the suburbs.

Class A advertised lease rates for medical office space are slightly higher than a year ago, increasing from $27.64 to $28.23/gross per RSF per year, while Class B product has decreased by ten cents to $24.68 per RSF.

Houston’s health care investment sales activity included 19 transactions, with an average price per sf of $227 and an average cap rate of 7.43 percent.