August 12, 2022
HOUSTON – The medical office market is in its most robust expansionary cycle in a decade with 18 buildings under construction containing 1.6 million square feet of off- and on-campus facilities, according to the latest research from Transwestern Real Estate Services (TRS). The new properties, which exclude hospitals, will deliver more than 400,000 square feet, or 25%, of the current pipeline, by the end of this year and are currently more than 40% pre-leased.
Houston’s medical office sector has gained strong momentum since 2012, delivering more than 7.1 million square feet, with average total completions exceeding 602,000 square feet every 90 days. Notable active owners and developers include Memorial Hermann Health System, Methodist Healthcare System, Kelsey Seybold & Welltower, Inc., UT Health Behavioral Sciences, Healthcare Trust of America and Healthcare Realty Services, Inc. Combined, they delivered more than 2.6 million square feet, or more than a third of all new medical office buildings in the last 10 years.
”These state-of-the-art facilities average nearly 90,000 square feet each and will contain operations catering to patient needs for everything from emergency services and clinical care to everyday healthcare, medical and therapeutic specialists,” said Robert Kramp, Vice President of Research & Investment Analytics at Transwestern. “As a result, the newly completed buildings are strategically located throughout Houston’s most rapidly expanding suburban residential communities where home building and multifamily construction are also experiencing historic highs.”
Transwestern Research is directly tying the historically high volume of construction to the rapid population growth across the region, home to the Texas Medical Center (TMC), the world’s largest medical complex. Houston was the second-fastest growing metro in the United States last year and one of a handful of major metros that gained population during the pandemic.
As expected, the largest concentration of construction is occurring in the TMC with 560,000 square feet underway. However, there is steady support from the suburban communities with 153,000 square feet of off-campus product in Clear Lake, 160,662 square feet in The Woodlands and 160,000 square feet in the Far West.
Download the Q2 2022 Houston Healthcare/Medical Office Report
About Transwestern Real Estate Services
Transwestern Real Estate Services (TRS) adds value for investors, owners and occupiers of all commercial property types through a comprehensive perspective and by providing solutions grounded in sound market intelligence. Part of the Transwestern companies, the firm applies a consultative approach to Agency Leasing, Asset Services, Tenant Advisory + Workplace Solutions, Capital Markets, and Research & Investment Analytics.
The privately held Transwestern companies have been delivering a higher level of personalized service and innovative real estate solutions since 1978. Through an integrated, customized approach that begins with good ideas, the firm drives value for clients across commercial real estate services, development, investment management, and opportunistic programs for high-net-worth investors. Operating from 33 U.S. offices, Transwestern extends its platform capabilities globally through strategic alliance partners whose unique geographic, cultural, and business expertise fuels creative solutions. Learn more at transwestern.com and @Transwestern.
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