Q1 2026 MEDICAL OFFICE UPDATE

Written by: Jake Lord

Jake specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial, and Retail groups. He is responsible for executing data reports, maintaining a commercial property database, reporting quarterly trends, performing data analysis, and utilizing statistical information to predict future behavior in the market. Keep reading for insights on the Columbus medical office market.

Key Takeaways

Health System Expansions: OhioHealth and The Ohio State Wexner Medical Center are leading the growth of healthcare facilities in Columbus. OhioHealth is expanding its campuses at Grant Medical Center and Riverside Methodist Hospital. OhioHealth’s new women’s health center at Riverside and Ohio State’s outpatient care center in Powell are both expected to open in late-2026 or 2027.

Occupancy Trends: Occupancy rates are now at 96.0%, which is above the national average. This reflects a general slowdown in new construction for non-hospital medical buildings given the current combination of high interest rates and building costs.

Lease Rates: Average lease rates for healthcare properties in Columbus increased quarter-over-quarter to $21.94/SF and remain below the national average. Local lease rates have fallen nearly $3.00 in the past two quarters, possibly due to increased supply.

Insurance Uncertainty: From the tenant side, we have seen a notable slowdown in deal activity for practices with a significant Medicaid or Medicare base given uncertainty in those markets. Private equity valuations for behavioral health platforms show a preference for geographic diversification and healthy insurance mixes.

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Check out the full Q1 2026 Medical Office Trends report here!

Q1 2026 Medical Office Trends

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As part of our recent Columbus Office Tenant Report, we also spoke with the medical office experts at Colliers | Columbus, who specialize in the leasing and sale of medical office properties throughout Central Ohio.

What differentiates medical office brokerage from other commercial real estate service lines, and how do those differences influence the space needs, design considerations and operational requirements of medical office tenants?

Medical office brokerage differs from other commercial real estate service lines due to the specialized nature of healthcare users and their operational requirements. Medical tenants typically require highly customized buildouts, often involving significant upfront capital for infrastructure, regulatory compliance and clinical functionality. As a result, these users tend to favor longer lease terms to amortize their investment and are generally less mobile than traditional office tenants. While this often requires greater initial capital from landlords and investors, it is typically offset by lower rollover risk and more stable, long-term tenancy.

- Corey Taber, Vice President

How do macroeconomic factors, such as changes in insurance legislation, impact your business and influence tenants’ expectations?

Macroeconomic factors play a significant role in shaping both tenant behavior and real estate strategy in the healthcare sector. Over the past year, uncertainty around Medicaid reimbursement has materially slowed growth among providers in the behavioral health and addiction treatment sectors.

Additionally, state-level reimbursement structures heavily influence site selection decisions for regional and national healthcare operators, particularly in sectors such as autism therapy. These variations can meaningfully impact provider expansion strategies and have contributed to uneven access to care across state lines.

- Corey Taber, Vice President

How are rising construction costs affecting leasing decisions and space requirements for medical office users? 

The tenants are needing to either extend lease term to amortize the construction cost over a longer period, or they contribute their own TI funds to make it work. Lease terms are trending longer, with 7–10 year deals now more common than the prior 5–7 year range.

 - Chris Potts, Senior Vice President

As Columbus’ major healthcare systems continue to expand, how has that growth influenced speculative medical office construction, if at all?

While healthcare system investment and expansion in Columbus remains strong, it has not translated into a meaningful increase in speculative medical office development. Unlike general office, medical office space

is highly specialized and often designed for specific clinical users, which makes speculative development more difficult to underwrite. That said, in Columbus and other major metropolitan markets, we have seen successful examples of multi-tenant medical buildings delivered with flexible infrastructure and competitive tenant improvement allowances. When paired with an anchor tenant that has a meaningful footprint, this approach can be an effective strategy for developers while still accommodating a broad range of medical users.

- Corey Taber, Vice President

Read this interview and more in our 2026 Columbus Office Tenant Report!