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Medical Office Activity Fuels Investment

MINNEAPOLIS-The medical office market is seeing robust figures, with construction activity at an all-time high of 775,000 sf of new product in the pipeline.

By Dana Dubriwny | Updated on July 18, 2006

MINNEAPOLIS-New construction activity is at an all-time high in the Twin Cities medical office market, with 775,000 sf of new product in the pipeline and more on the way in the second half, according to the latest report from locally based United Properties. Overall vacancy is tight at 9.4%, and several hospital campuses report virtually 100% occupancy for multi-tenant space at mid-year. According to United’s documentation, the on-campus vacancy rate is 6.4% at mid-year, while the off-campus rate is 14.9%.

“The medical office market is equally distributed between on- and off-campus projects, driven primarily by regional healthcare delivery organizations such as HMOs and hospital-affiliated organizations,” says Stephen H. Brown, vice president, United Properties Healthcare Group. “An increasing number of physician groups are vying with traditional retailers for high-visibility space in major retail districts for broader access to consumers.”

Mike Ohmes, senior vice president, United Properties Brokerage Services, says the healthcare investment industry in Twin Cities has substantially increased throughout the past five years. While the firm has been tracking office and industrial figures for nearly 15 years, the company just recently began following medical office movement.

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