Data at a Glance:

  • 965,000 square feet: New Jersey’s medical office building (MOB) pipeline, the largest amount under construction nationally.
  • 20.8%: the growth of MOBs in Atlanta between 2014 and 2023, making it the fastest-growing large market nationally by percentage.
  • 469,000 square feet: the size of the largest property set for a 2024 delivery, the Eastpark Medical Center in Madison.
  • 37.4 million square feet: the current size of Los Angeles’ MOB inventory, the largest in the U.S.

Healthcare expenditure made up 16.6% of the United States’ GDP in 2023, totaling more than $4.5 trillion. This represents the largest share of GDP worldwide, even as U.S. healthcare volume is estimated to increase a further 10% by 2027. Consequently, it comes as no surprise that medical office buildings remain a niche, yet resilient commercial real estate asset even amid difficult capital conditions.

Looking to draw a bottom line when it comes to the medical office building market in yet another transformative year, CommercialSearch compiled current inventories and construction pipelines of medical office buildings larger than 25,000 square feet nationally. Then, using that data, we analyzed the state of the industry from the following perspectives:

  • The top 10 MOB markets with the most medical office space under construction
  • The 10-year growth of the top 10 largest MOB markets nationally
  • The top 20 largest MOBs and healthcare facilities scheduled for completion this year

New Jersey, Houston & Miami Neck and Neck in MOB Construction Pipelines

Medical offices are commonly touted as a recession-proof investment due to increasing demand for healthcare and very low tenant turnover. At the same time, speculative medical office development by REITs and institutional investors is rare, and demand for new construction is mostly tenant-driven. The result is evident in the amount of medical office space currently being developed, with no market exceeding 1 million square feet under construction. Still, three markets — New Jersey, Houston and Miami — came close to the 1 million mark, being home to the most medical space underway by a large margin.

New Jersey is home to the largest medical office building pipeline with 964,500 square feet, narrowly surpassing Houston to take the crown. The square footage underway in the Garden State’s MOB market will increase its total inventory by 5.3%, making it one of the fastest-growing markets nationwide. Notably, the state is already home to more than 2,000 licensed hospitals, nursing homes and medical care facilities, and nearly 500,000 people are employed in the healthcare industry, making it a significant health hub on the East Coast and justifying the market’s considerable medical office pipeline.

At #2, Houston currently has 963,000 square feet of medical office buildings currently under construction, narrowly missing first place by 1,000 square feet. Once completed, these facilities will increase the market’s inventory by around 3.1%. This points to the fact that medical properties in the metro are experiencing a period of accelerated growth, as MOB deliveries in 2023 also added another 3.3% of inventory after several years of sub-2% growth. Of course, healthcare plays a key role in Houston’s economy as well, providing an estimated 12% of the metro’s employment. In fact, the Texas Medical Center alone — the world’s largest medical complex — cares for more than 10 million patients per year.

Closing out the podium at #3, Miami is the fastest-growing MOB market in the top 10 except for Madison, with the 960,000 square feet of space under construction here marking a future 11.9% increase in the market’s inventory. Home to a surging population and one of the top retirement destinations in the U.S., the Miami healthcare industry is scrambling to keep up, and this best evidenced in the rapid growth of medical offices here. One area particularly benefiting from the growth is the Health District, which is home to a large concentration of medical facilities as well as the University of Miami’s Miller School of Medicine. Additionally, the metro’s many healthcare and life sciences startups further stand to support Miami’s large healthcare and medical tourism industries.

Back in Texas, Dallas currently has 560,000 square feet of space currently under development, granting it fourth place on the list of fastest-growing markets for medical space. While Houston is likely the first Texas hub that comes to mind when healthcare is the subject, the Metroplex is certainly not to be ignored. DFW is home to a healthcare industry that makes up 15% of its annual GDP, according to the Dallas Regional Chamber, making it an industry centerpiece within the Texas Triangle and one of the major healthcare centers of the South.

Meanwhile, Los Angeles — currently the largest medical office market nationally — is set to add the fifth-most inventory with 530,000 square feet across just two properties larger than 25,000 square feet. Here, the relatively slower growth of MOB construction in Los Angeles compared to the top three markets can be attributed to factors such as the market’s greater fragmentation, with medical facilities being spread across Greater LA’s numerous cities, rather than concentrated in medical centers. At the same time, LA also faces less medical office supply pressure than other markets in conjunction with slower population growth.

Houston Medical Office Market Sees Biggest 10-Year Expansion as LA Development Lags

While Los Angeles remains the largest market by medical office inventory nationwide, development in the last 10 years highlights a potential reversal as the two highest-volume Texas markets are rapidly catching up. See the graph below for the growth of the largest medical office markets in the U.S. by current inventory throughout the last 10 years:

Looking at 10-year trends for the nation’s largest medical markets, there are several clear winners. First and foremost, Houston was home to the largest boost of medical office space with 4.9 million added between 2014 and 2023. This brings the market’s total to 31.1 million square feet — just 6 million behind Los Angeles’ total inventory. The disparity in construction between the nation’s two largest medical markets means that the gap is much lower compared to 10 years ago, when Houston totaled 26 million square feet compared to LA’s 35 million.

Staying in the Lone Star State, Dallas-Fort Worth had an almost equal level of healthcare property construction in the same time period with 4.75 million square feet in total. However, after overtaking Chicago’s inventory in 2017, lagging construction in 2023 and a comparatively smaller current pipeline means that the Metroplex remains slightly behind its fellow Texas entry in terms of total inventory.

Up next, Atlanta added 3.8 million square feet of medical office space in the last decade, resulting in market growth exceeding 20%. Granted, this was aided by the market’s relatively smaller size, marking the fastest 10-year growth out of all 10 of the largest MOB markets. Home to health organizations including the CDC and the Carter Center, Atlanta is also experiencing a temporary hike in demand for medical space due to the late 2022 closure of Atlanta Medical Center.

Not far behind, Chicago medical office developments between 2014-2023 totaled 3.5 million square feet of space for a growth of 13.7% in that period. Home to multiple academic medical centers and nearly 100 health care centers, the city is a major health hub. Even so, the brain drain experienced by the Chicago health care industry since the pandemic is still affecting accessibility to care, as well as appetite for new investments in developing further properties.

Meanwhile, Philadelphia saw just under 3 million square feet of space in medical office buildings delivered in the last decade for the fifth-largest increase by square footage, as well as the fourth-largest percentage growth out of the 10 largest markets nationwide. Home to a robust health care sector, Philly also benefits from the positive influence of innovative startups in the field, such as AI-powered pathology platform Proscia and mental health software developer NeuroFlow.

Madison, Wis. & Philadelphia Home to Largest Medical Office Buildings Set for 2024 Delivery

Recently, the trend in the medical office industry was toward increased consolidation of medical services. To that end, medical providers attempt to offer a “retailized” medical service experience by adding more medical facilities within the same building or complex. The consequence of this change is a shift to construction of outpatient facilities spanning hundreds of thousands of square feet.

For example, at 469,000 square feet, UW Health’s Eastpark Medical Center in Madison, Wis. — the city’s only MOB larger than 25,000 square feet currently underway — is the fruit of these aforementioned trends in MOB development. Aiming to offer patients the opportunity to see various providers during the same visit, this seven-story outpatient facility will house facilities pertaining to adult oncology, women’s specialty care and numerous other specialty clinics, as well as laboratory services and advanced imaging. When it opens in Q3 of this year, patients will benefit from advanced proton cancer treatment, innovative upright treatment technologies and more.

Otherwise, Philadelphia’s only medical facility larger than 25,000 square feet scheduled for delivery this year, the Honickman Center comes in at 462,000 square feet and spans 20 stories of state-of-the-art medical office space. The property will be home to several specialty programs, including cancer and respiratory care; gastroenterology; and more. Intended as Jefferson Health’s flagship medical building in Philadelphia’s Center City, the facility will bring prime health care to the heart of Philadelphia.

The next two largest properties have already opened their doors to patients in early 2024. The first is Wellness Way in metro Albany, N.Y., the new, 263,000-square-foot home of multispecialty medical group Community Care Physicians. With 22 specialties including audiology, pediatrics and dermatology as well as 142 specialty providers, the new facility aims to offer a comprehensive patient experience for Albany County residents.

Additionally, NYU Langone opened a new ambulatory care facility at 1111 Franklin Ave. in Garden City, Long Island totaling 260,000 square feet and 32 clinical specialties. The space — which was previously a Bloomingdale’s and Sears building — has been converted into a state-of-the-art medical facility with a capacity of 400,000 patients per year. It’s worth noting here that conversions to medical offices have picked up in recent years, especially in areas with scarce developable land. Besides full-building conversions, individual office spaces are also being converted into medical space as office building owners try to prop up occupancies.

Back in Texas, the largest MOB to be completed in Houston in 2024 is Kelsey-Seybold Clinic’s development at 8303 N. Sam Houston Parkway E. totaling 256,000 square feet and making it this year’s fifth-largest completion nationwide. The company — one of metro Houston’s largest multispecialty practices — invested a reported $77.5 million in the facility, which is scheduled to open its doors around August this year.

Houston was also the site of five more of the 20 largest medical facilities set to open in 2024. These included (1) Building 3 of Memorial Hermann Sugar Land Medical Plaza; (2) Building 2 of the Kelsey-Seybold Fort Bend Clinic; (3) the Kelsey Seybold Clear Lake Ambulatory Surgery Center; and (4) the 1715 Project. Not to be outdone, one additional Texas entry made it among the top 20 largest MOB completions this year — UT Health at Kyle Seale Parkway in San Antonio at #19.

Nationwide, Florida boasted the second-most properties among the 20 largest with three, while New York state was home to an additional two.

Chicago, Houston & Columbus Medical Centers Stand as Largest 2023 MOB Completions

Looking at the largest properties completed last year, the Joan & Paul Rubschlager Building took home the title, with a total of 487,600 square feet. Home to Rush Cancer Center — Chicago’s newest location for cancer, neuroscience and digestive diseases care — the $450 million facility opened in early 2023. Up next were the O’Quinn Medical Tower in Houston and the James Outpatient Care and Proton Therapy Center in Columbus, Ohio. See the table below for the remaining largest 2023 MOB completions.


All property and market data courtesy of CommercialEdge. Individual building data and market stats were extracted on February 8, 2024 and is subject to change. For the purposes of data accuracy, only medical office buildings or mixed-use buildings containing medical office space larger than 25,000 square feet were included.

The list of largest medical office building completions in 2024 includes properties that have already been completed as of the publication of this article. While CommercialEdge attempts to ensure the accuracy of projected completion dates, final completion and opening dates may differ.