Report | Adaptive Spaces

2021 U.S. Medical Office Trends

Resilience Amid Historic Change

11 Apr 2021 25 Minute Read

Digital thermometer, latex gloves, hand sanitizer, face masks, stethoscope

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The U.S. health care industry and medical office market were impacted by the COVID-19 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, but a return to secular, stable growth is expected over the next five years.
  • 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.

In this report, CBRE forecasts the top 10 trends most likely to impact the medical office sector’s recovery, including employment growth, capital flows and leasing demand.

U.S. Employment Growth

Graph showing U.S. Employment Growth Q4 2019 through Q4 2020

Source: Oxford Economics, December 2020.
Notes: Q4 forecast based on historical data through November 2020. Health care employment consists of hospitals and ambulatory health care services.

U.S. Medical Office Property Sales Volume

Line graph showing U.S. Medical Office Property Sales Volume Q4 2001 through Q4 2020

Source: Real Capital Analytics, February 2021. Based on independent reports of properties and portfolios $2.5 million and greater.

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