Vital Signs: 2025 Healthcare Update

Robust Demand for Medical Outpatient Increased occupancy and strong absorption in 2024

MOB LEASING

• Leasing activity was strong across both on- and off campus medical outpatient assets, pushing the occupancy rate higher as of the third quarter. The market occupancy rate has increased 53 basis points (bps) over the last four quarters and currently stands at 92.8%, a cyclical high. • Absorption of medical outpatient space continues at a robust pace. Third-quarter absorption was slightly slower on a quarter-over-quarter (QOQ) basis but was 42% stronger than absorption during the third quarter of 2023. Absorption over the last 12 months totaled 16 million square feet (msf), up 25% over the previous 12-month period (Q4 2022 - Q3 2023). • Quarterly completions of new space averaged about 3.1 msf per quarter over the last five years. Completions of 3.1 msf in the third quarter of 2024 were directly in line with this quarterly average. On a 12-month basis, completions totaled 12.4 msf through the third quarter. This pace of deliveries was 21% higher than completions in the previous 12-month period (Q4 2022 - Q3 2023). Another 14.7 msf of new construction is expected to be delivered in the next 12 months. Many of these projects were planned during the peak pandemic years of 2020-2021.

7

93%

6

5

92%

4

3

91%

2

Million Square Feet

1

0

90%

2021 Q1

2019 Q1

2021 Q2

2022 Q1

2021 Q3

2023 Q1

2019 Q2

2019 Q3

2021 Q4

2024 Q1

2020 Q1

2019 Q4

2022 Q2

2022 Q3

2023 Q2

2023 Q3

2022 Q4

2024 Q2

2023 Q4

2024 Q3

2020 Q2

2020 Q3

2020 Q4

Completed SF (LHS)

Absorption SF (LHS)

Occupancy Rate (RHS)

Source: Revista Med (based on Top 50 Markets, 7,500+ sf MOBs), Cushman & Wakefield Research

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