With average asking rents continuing to rise—albeit at a slower pace, from 3.7% growth in 2023 to 2.5% in 2024—medical outpatient buildings are emerging as a lucrative asset class in an otherwise challenging market.
The financial appeal of MOBs stems from their resilience and ability to outperform other office categories, according to a JLL report. Premium properties are leading the way, with rents in the 90th percentile of Revista’s top 100 markets achieving a compound annual growth rate (CAGR) of 2.4% between 2019 and 2024, compared to a 1.8% CAGR for mid-tier properties. Escalation clauses are also boosting returns, with average lease escalators hitting 3% in 2024, surpassing rent growth and creating additional value for landlords.
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