2019 Q3 Greater Phoenix Medical Office Market Report

Download Report

Q3 2019 Medical Office Market

  • Greater Phoenix continues to remain in the Top 5 metros for job creation in the country, albeit with moderating growth. During the 12-month period ending in August, preliminary estimates show that employers added 57,800 net new jobs, an increase of 2.7 percent but below the 62,500-average increase over the first half of 2019.
  • According to the BLS (Bureau of Labor Statistics), over-the-year nonfarm employment rose in 32 of the 51 metropolitan areas with a 2010 Census population of 1 million or more, while employment was essentially unchanged in 19 areas.
  • Net absorption, which turned negative in Q2 at (152,827) square feet, rebounded to positive territory with nearly 100,000 square feet absorbed.
  • Employers continue to add workers at a very active pace with healthcare employment rising 3.7 percent over-the-year, beating the overall employment market increase of 2.7 percent.
  • Year-to-date developers have added 211,582 square feet to the market. Despite the increase in deliveries vacancy edged 30 basis points (bps) lower to end the quarter at 13.6 percent and marks the 8th consecutive quarter with vacancy rates below 15 percent.
  • Asking rents witnessed a mild 0.2 percent over-the-quarter increase but rose 3.1 percent over-the-year to end at $21.16 per square foot.
  • Year-to-date investment sales volume increased to $238 million across 41 transactions, which is the highest reading since 2015’s $288 million amount. The median sales price per square foot was $158, with cap rates resting at 8 percent.

Outlook: The forecast for the local medical office market remains largely favorable. The primary drivers of medical office demand remain firmly in place. Robust population and job growth should continue to propel the MOB market in both the near-to-medium terms.

More than $1 billion of bioscience-related projects are currently under construction, with more than $2 billion set to launch over the next couple years and expected to create nearly 7,000 new jobs once all projects are completed.

Medical Office Market Colliers International in Arizona

2019 Q3 Greater Phoenix Medical Office Market Report

Download Report
Related Experts

Thomas Brophy

Research Director


As national director of multifamily research & analytics for the Cooke Multifamily Team with Colliers International, I am responsible for the aggregation, management and analysis of all market, and related, data sets.

I am committed to providing market-leading research services through the systematic deployment of custom, purpose-built software and analytic platforms for the creation of qualitative, not just quantitative, analysis.

In addition to publishing quarterly statistical reports for each market in which our clients operate, I maintain a database of both publicly available, and in-house built, leading economic/real estate indicators to provide forecasts and analyze and interpret real estate trends as they happen.

I also produce customized research reports on behalf of the team and clients, prepare market presentations and develop ad hoc research projects in support of business development.

My ethos: question different; for it is in asking better, more salient, questions that true market knowledge, and understanding is found. I am reminded of the words of T.S. Eliot who stated, “Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”

In our new era of big data, we have reached peak data overload. Knowledge is a derivative of information; wisdom, knowledge’s ultimate abstract, can only be gained when tethered to, and guided by, past experience.

Data without context is like a light without a bulb, a market without a narrative or an explanation without a common reference point. Data is but a guide to asking better questions; better questions lead to greater understanding, which, if deployed effectively and purposely, lead to better results.

The Cooke Multifamily Team focuses on institutional and private equity assets, ranging from core plus to workforce housing across the United States. Our team includes Cindy Cooke, Brad Cooke, Matt Roach, Chris Roach, Teresa Lowery, Ron Cameron, Nicholas Solo, Aimee Healy and Kellyanne Kennedy.

Previously, I served as research director for Colliers International in Arizona, managing the research department entrusted with all market data and analysis activities. My creative outlook significantly enhanced research services for clients and brokers. Collaborating with other service lines and professionals, our research team provided extensive data compilation, including ownership, zoning, land use, property sales and demographics, and developed reliable statistical information.

My extensive experience includes collecting, analyzing and preparing market and economic data and research, as well as expertise in corporate communications, investor relations, strategic planning, brand management and public speaking.

Prior to Colliers, I was director of research for ABI Multifamily, where I developed market reports and research data used in marketing materials for ABI offices in Phoenix, Tucson, Sacramento and San Diego. I oversaw all data collection and reporting, wrote monthly market insight articles, and developed market podcasts.

As director of research and partner for Neighborhood Ventures (a multifamily investment firm), I collected, analyzed and wrote market data reports for use in investor presentations, offering materials and corporate communications. As principal with EPU Investments, I directed business and research operations for a multi-divisional investment company involved in single- and multifamily development and land services, including farming and water rights assessments and acquisitions.

Serving as an affordable housing specialist at Hendricks & Partners (now Berkadia), I provided assistance, research and guidance in creating the affordable housing division, and assisted brokers and clients in the acquisition and disposition of assets across the U.S.

View expert