H2 2025 Portland Metro Area Medical Outpatient Trends

- Leasing activity continues to be dominated by renewals, with most medical groups opting to renew in place due to limited availability of second-generation medical space.

- Second-generation medical space remains a highly cost-effective option for tenants; however, inventory is extremely constrained, limiting opportunities for relocation or expansion.

- Build-to-suit, ground-up development has become increasingly cost-prohibitive, with medical build-out costs averaging approximately $225 per square foot. While some lenders are offering up to 100 percent financing, high construction costs remain a significant barrier.

- Owner-user medical buildings continue to retain their value, supported by sustained demand. This segment differs from larger, institutional investment assets, where market dynamics vary due to scale and investor profiles.

- The average net asking rent for medical outpatient space in Portland ended 2025 at $27.31 per square foot on an annual triple-net (NNN) basis, reflecting an approximately 3 percent increase year-over-year.

- The Portland medical outpatient market closed 2025 with an overall vacancy rate of 7.8 percent, an increase of 240 basis points compared to the same period in 2024.

- A notable leasing transaction in the second half of 2025 was East Portland Surgery Center’s 17,585-square-foot lease at Gresham Station Medical Plaza.

- A key sales transaction during the same period was Crown MedRealty Partners’ acquisition of Broadway Medical Center, a 35,419-square-foot property, from Medical Clinic Investment Corporation for $14.4 million, or $408 per square foot.