Commercial Investment Real Estate January/February 2018 | Page 9

Medical Office
Building Forecast
8.5 msf
Cost of
Living
Diverges
in Top 5
U.S. Cities*
CONSTRUCTION: New building falls
below the previous five-year average
for medical office in 2017. The
Midwest and Southern regions will
lead deliveries this year. Almost 9 msf
of space was completed in 2016.
40 basis-point decrease
VACANCY: Absorption is strong in 2017,
propelling the overall vacancy rate to
7.6 percent. The rate will stay
tightest in the Pacific Northwest,
Central Plains, and California regions.
In 2016, medical office vacancy
declined by 80 basis points.
604.1
Overall
Housing
Health
312.9
314.1
272.6
268.8
180
169.9
New York City
Chicago
ASKING RENT: West Coast
regions delivered the highest
rents, with several
markets well above
$30 psf in 2017.
The average rent
moved up slightly
to $23.03 psf
nationally.
166.2
124.7
110 110.9 112.4 101.1
0.8% increase
Boston
115.3
93.3
Los Angeles
San Francisco
* 100 = national U.S. average for the cost of living
Source: Sperling’s Best Places
Top CRE Executives Select
Best Investment Choices
Source: Marcus & Millichap
1 2 3 4 5 6 7 8 9
56% 53% 31% 31% 22%
Healthcare Industrial Data Centers Multifamily Student Housing
18%
10%
Downtown Office Suburban Office
8% 7%
Hotel Retail
Source: DLA Piper 2017 State of the Market Survey
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January | February 2018
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