US Medical Office Trends 2021

The U.S. health care industry and medical office market were severely impacted by the COVID pandemic in 2020. Despite the downturn, health care employment rebounded much more rapidly than the broader job market, and medical office buildings were more insulated from the sharp declines in demand for most other property types.

• Health care employment fell by as much as 6.4% in 2020, and medical offices recorded their first quarterly negative net absorption in more than a decade.
• Medical office properties are expected to see a strong rebound in demand this year once the COVID-19 virus recedes. Investors are sensing good growth opportunities with pricing and sales transaction levels more resilient than for most property types.
• While telehealth will clearly play a greater role in health care, its impact on medical offices is likely to be negligible.