Philadelphia’s medical office market is regaining balance as the spring season begins. As a result, the sector is showing early signs of stabilization following a recent slowdown.

After reaching a low of 8.1 percent at the end of 2024, vacancy has increased modestly. As of April 2026, the rate stands at 9.1 percent. However, vacancy has remained within a narrow range over recent quarters.

Specifically, the rate has held between 9.0 percent and 9.1 percent for three consecutive quarters. Therefore, a more stable leasing environment is beginning to take shape.

Recent leasing activity continues to support this trend. In January, Virtua Health renewed an 11,600-square-foot lease in Camden County. As a result, long-term commitment to the region has been reinforced.

Meanwhile, a 14,000-square-foot lease was signed in Holmesburg. Consequently, demand for neighborhood-based healthcare space remains strong.

Notably, these deals exceed the average lease size recorded in 2025. At that time, typical medical office leases averaged approximately 2,860 square feet. Therefore, larger tenants are beginning to reenter the market.

Although vacancy has risen slightly, the region remains well positioned nationally. Strong healthcare systems continue to anchor demand across the market.

In addition, growth in the life sciences sector is providing added support. As a result, a diverse mix of clinical and research space is being sustained.

Ultimately, the market is entering a more stable phase. Continued demand from healthcare providers is expected to support long-term performance.