Houston Medical Office Market Report
Market Overview
Houston’s status as a premier market for medical real estate is supported by several key factors. The presence of the renowned Texas Medical Center creates a large demand for medical facilities, with new investments creating more than 23,000 permanent new jobs and 19,000 construction jobs. Houston’s diverse and sizable population also ensures consistent healthcare service needs. Its thriving economy, business-friendly environment, and location position it as an ideal hub for healthcare innovation and investment. Investing in healthcare properties comes with challenges, including various regulations and compliance requirements. However, careful consideration of market dynamics can yield attractive opportunities for investors. Those seeking stable income and long-term growth in Houston’s medical real estate sector can be immensely successful in the market.
Market Performance
In Houston, the market rent stands at $26.57 per square foot, and rent growth stands at 0.9%. The 12-month net absorption stands at 275,304 square feet, indicating a positive trend for occupied spaces. In 2024, Northeast Houston’s Generation Park will open BioHub II, a 45-acre biomanufacturing hub, while the Texas Medical Center unveils Helix Park. BioHub II will provide 500,000 square feet for manufacturing, labs, and offices, with an added focus on workforce development. Meanwhile, Helix Park’s TMC3 Collaborative Building aims to foster collaboration between academia and industry, projecting an annual economic impact of over $5.4 billion and creating thousands of jobs. These initiatives signal a significant push for scientific advancement and economic growth in the region.
The total sales volume for both investment and owner-user sales has reached an impressive $118 million, with an average sales price of $2 million.
Houston, TX, By The Numbers | Last 12 Months | Source: CoStar Group
- Average Sales Price: $2M
- Average Cap Rate: 8.1%
- Sale Price Per SF: $258
- Average SF: 10.8K
- Sales Volume: $113M
- Vacancy Rate: 14.7%
- Net Absorption: 275,304 SF
