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Medical office leasing slows despite strong job growth

Healthcare service organizations gravitate toward alternative building types
Healthcare tenants are taking more space in flex/industrial properties, such as 8201 East 34th Street in Wichita, Kansas, where a medical device maker recently executed a lease. (CoStar)
Healthcare tenants are taking more space in flex/industrial properties, such as 8201 East 34th Street in Wichita, Kansas, where a medical device maker recently executed a lease. (CoStar)
CoStar Analytics
August 19, 2026 | 7:44 P.M.

The healthcare sector has been the most powerful job-creation engine in the U.S. economy over the past few years, now employing nearly one in seven workers. Medical office leasing, however, has not reflected this strength, resulting in a vacancy rate that has plateaued well above its pre-2020 level.

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