Phoenix Medical Office Figures Q3 2026

Despite the recent slowdown in leasing, Phoenix medical office fundamentals have remained strong. The market has posted six consecutive quarters of positive net absorption since Q2 2025 with vacancy falling by 250 bps during that span. At 11.9%, medical office vacancy was nearly 700 bps lower than traditional office product, signifying the demand for medical space in the Valley. Of the 375,000 sq. ft. underway, only 28.8% was available for lease, limiting supply side pressure in the near-to-mid term. The rapidly evolving economy in the Phoenix metro will likely continue to drive population growth, which will further elevate demand for medical services and space demand for the foreseeable future.