Philadelphia’s medical office sector, long regarded as one of the most stable segments of commercial real estate, is starting to show signs of strain in 2025. After years of outperforming traditional office properties, demand has begun to soften.
In 2024, medical office absorption reached 300,000 square feet, but by mid-2025 that momentum reversed sharply, falling to -232,000 square feet. Forecasts indicate an additional 74,000 square feet could be vacated before year’s end.
As a result, vacancy has crept up to 8.6%, a 50-basis-point increase from the seven-year low recorded at the close of 2024. While leasing activity has remained relatively steady—with nearly 85 new deals signed in the first half of the year—those transactions have generally been smaller in scale, with average deal size down about 10% from late 2024.
For more information about Philadelphia medical space for sale or lease or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.
Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia medical commercial real estate broker that provides a full range of commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors, and sellers.
Please visit our website for a full listing of commercial properties for lease or sale, www.wolfcre.com.
