Philadelphia’s medical office market recorded stronger rent growth in mid-2026 despite moderate leasing activity. Asking rents increased 2.5% year over year to an average of $27.72 per square foot. Notably, medical office rent growth outperformed Philadelphia’s traditional office market during the same period. The increase also reversed six consecutive quarters of slowing rent growth.
However, stronger pricing does not necessarily signal a major increase in tenant demand. Instead, limited availability continues supporting rents across Philadelphia’s medical office market. Medical office availability stood at approximately 10.1% in mid-2026. Healthcare providers continue seeking space for outpatient facilities, specialty practices, and ambulatory care centers. Yet, modern properties capable of supporting those uses remain particularly scarce.
Philadelphia has approximately 4.3 million square feet of available medical office space. Of that total, less than 350,000 square feet sits within buildings constructed since 2015. Consequently, healthcare tenants seeking newer facilities have significantly fewer options. That scarcity can give landlords greater pricing power, even during periods of moderate leasing activity.
Additionally, smaller medical office leases can achieve higher rents than larger transactions. These deals can influence overall asking rates, particularly when tenants compete for specialized locations.
Meanwhile, limited construction is doing little to ease the shortage. Only approximately 295,000 square feet of medical office space was under construction in mid-2026. Nearly all that space was already pre-leased or planned for owner-occupants. Therefore, little new inventory is expected to become available to tenants in the near term.
For medical office landlords, limited competition from new development could continue supporting existing properties. For healthcare tenants, finding newer space may remain challenging as outpatient care continues expanding. Philadelphia’s recent medical office rent growth reflects this imbalance. Rather than surging demand, a shortage of modern healthcare space is helping drive rents higher.
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.
