Medical Office Building (MOB) Market Overview
The medical office market continued to perform favorably over the past year, with current occupancy rates once again surpassing the 90% mark. The market absorbed 41,000 square feet over the past twelve months and average rent increased from $19.59 per square foot at mid-year 2004 to $20.76 per square foot at mid-year 2005.The medical office market continued to perform favorably over the past year, with current occupancy rates once again surpassing the 90% mark.
The majority of space in this 1.45 million square foot market is located in and around the campuses of Columbia’s four major hospitals, Lexington Medical Center, Palmetto Health Baptist, Palmetto Health Richland and Providence Hospital.
MOB Past Trends
The MOB market has remained strong over the past several years. Even with Palmetto Parkridge and the Irmo Professional Center adding a large amount of MOB space in 2004, occupancy rates only dropped below 90% for a brief period. Average rental rates have risen significantly from $18.25 per square foot in 2002 to the present average of $20.76 per square foot.
Historically low interest rates have given rise to many practices purchasing or building their own medical office space and moving away from hospital-owned MOB’s. Even with this trend, the demand for multi-tenant medical office space has remained high over the first half of the decade, as demonstrated by high occupancy and ever increasing rental rates.
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