Medical office buildings are rarely a one-story building encompassing a reception desk, waiting area and the office itself. Instead, the growing number of seniors requiring health care and the accelerated population growth of some metro regions has led to providers tending toward larger, specialized facilities to expand their capabilities in key areas. At the same time, medical office space has come out of the pandemic as one of the more resilient commercial asset types. Accordingly, multitenant medical buildings are increasingly popular with investors looking to diversify their portfolios amid uncertainty.
The result is a boom in medical office building construction — both in terms of owner-occupied properties, as well as rentable facilities. So, to gauge where the acceleration in development is concentrated, 42Floors ranked the 20 largest U.S. medical office properties due for completion this year.
Using data courtesy of CommercialEdge, 42Floors analyzed the largest medical office buildings and their distribution by city and by state.
New Brunswick’s 210 Somerset St. property ranks as the fourth-largest medical office development in the U.S. slated to be delivered in 2023. The property is owned by AST Development and will span 229,000 square feet.
In addition, there is one other entry from New Jersey among the 20 largest medical office deliveries of 2023 — the 166,000-square-foot 400 Route 38 property in the Philadelphia suburb of Moorestown, the former Moorestown Mall, ranks fifth on the list. Cooper University Health Care now owns the property.
More details on the properties:
- JLL: Healthy outlook for N.J.’s medical office market
- Cooper opts to buy, rather than rent, former mall building for outpatient facility
At a national level, Texas is home to the most entries among the 20 largest medical office developments of 2023. The total of six projects to be delivered in the Lone Star State this year add up to 1.07 million square feet of space.
What many entries in the Top 20 had in common was the fact that they were all owner-occupied expansions of campuses belonging to larger health care operators.
New Jersey, Florida and Kentucky were tied with two entries each in the Top 20. In particular, the total square footage of New Jersey’s medical office buildings under construction was the second-largest total nationally.
All property data — including square footage, asset class and projected completion — is courtesy of commercial real estate research and listings platform CommercialEdge. The data was extracted on March 23.
The study included properties listed as having “medical office” as their primary use type, with mixed-use properties also being included. To make the list, a property had to have a projected completion date between Jan. 1 and Dec. 31.