The medical office sector saw its vacancy rate rise to 8.9 percent, which was a 40 basis point increase from the second quarter of 2019. COVID-19 also caused several projects to be abandoned altogether or delayed. However, Marcus & Millichap view the setbacks as a positive because they’ll prevent oversaturation in the market.
The market itself is still booming because of an aging baby boomer population relying heavily on physician services. Patients in the 55-64 year age range attend four physician visits annually, where patients in the 65-74 year age range attend 5.9 physician visits annually, and the number increases to 7.6 visits for patients 75 years or older.
The report concludes, “Despite the short-term costs, the healthcare industry will be one of the quickest to bounce back from the pandemic since the care needs of a growing and aging population continue to increase.”
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