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2021 U.S. Medical Office Trends

Resilience Amid Historic Change
April 12, 2021

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

fig_1_medical_office_report_web_figures_021721

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

fig_3_medical_office_report_web_figures_021721

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

Related Insights

 

The Weekly Take - A Spoonful of Sugar: Trends in Medical Offices and Life Sciences Buildings

Healthcare delivery has played an important role during the pandemic, which has accelerated trends in life sciences properties and medical office buildings. Pete Bulgarelli, President and CEO, Lillibridge Healthcare Services and Executive Vice President, Office at Ventas, and CBRE’s Chris Bodnar join Spencer to examine the changes driving these industries and how operators and investors are adapting.

 

Listen to more The Weekly Take Podcasts

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Contacts

Christopher Bodnar
Vice Chairman
Capital Markets, Healthcare
+1 303 628 1711
+1 720 635 2653
+1 303 628 1751
Lee Asher
Vice Chairman
Capital Markets, Healthcare
+1 404 504 5965
+1 404 964 7931
+1 404 923 1499
John Poulos
National Healthcare Director
Healthcare
+1 216 448 8530
+1 440 781 7927
+1 216 448 8010
Richard Barkham, Ph.D.
Global Chief Economist & Head of Americas Research
+1 617 912 5215
Spencer Levy
Global Chief Client Officer and Senior Economic Advisor
+1 617 912 5236
Julie Whelan
Global Head of Occupier Thought Leadership
+1 617 912 5229
Ian Anderson
Senior Director of Research and Analysis
+1 215 561 8997
+1 215 557 6719

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