Medical Office Cap Rates: Medical Outpatient Buildings
Medical office buildings averaged a 7.1% cap rate nationally in Q2 2026, per CBRE. Why medical office holds up better than general office, and value at each rate.
By the CapRateCalculator.co team
Medical office buildings averaged a 7.1% cap rate nationally in the second quarter of 2026, according to CBRE’s figures for medical outpatient buildings. That was up just 4 basis points from a year earlier. General office cap rates moved far more over the same period, which is the main reason investors treat medical office as its own property type.
Value at medical office cap rates
| Cap rate | Value of $1,000,000 NOI |
|---|---|
| 6.5% | $15,385,000 |
| 7.1% (Q2 2026 average) | $14,085,000 |
| 7.75% | $12,903,000 |
Why medical office behaves differently from office
Medical tenants build out exam rooms, imaging suites and surgery space with plumbing, shielding and equipment that cost far more than a standard office fit-out. Moving means paying for that again, so renewal rates are high. Demand comes from patients, not office employment, and it grows with an aging population and the shift of procedures from hospitals to outpatient settings.
General office cap rates spread out widely as hybrid work cut demand. See the office cap rates guide for those ranges.
What moves a medical office cap rate
Hospital affiliation. Buildings on or next to a hospital campus, or leased to a hospital system, trade at the low end.
Tenant mix. A building leased to a health system or large physician groups is lower risk than one with many small practices.
Lease term. Long leases with rent increases lower the cap rate. Many leases expiring at once raise it.
Building age and specs. Older buildings may need costly upgrades to suit modern outpatient care.
How medical office NOI works
Many medical office leases are net or modified gross, with tenants paying a share of taxes, insurance and common area costs. Count the expenses the landlord keeps, plus management and reserves, before dividing by a cap rate. The does cap rate include expenses guide covers what belongs above NOI, and cap rates by property type compares medical office with other sectors.
Source: CBRE, Q2 2026 U.S. Medical Outpatient Buildings Figures.
Frequently asked questions
What is the average cap rate for medical office buildings?
CBRE put the national average cap rate for medical outpatient buildings at 7.1% in the second quarter of 2026, up 4 basis points from a year earlier.
Why do medical office buildings trade at lower cap rates than regular office?
Medical tenants spend heavily on specialized buildouts, so they tend to renew rather than move. Demand comes from health care needs, which are steady and growing with an aging population, rather than from office employment and remote work trends.
What makes a medical office building more valuable?
Being on or next to a hospital campus, a hospital system as a tenant or sponsor, long leases and a mix of specialties. Off-campus buildings with small private practices and short leases trade at higher cap rates.