10 — May 2026 — Healthcare — M id A tlantic Real Estate Journal
www.marej.com
H ealthcare
Team Lizzack-Horning of The Clinical Group Healthcare CRE tightens as New Jersey demand grows in Q1 2026
T
he U.S. healthcare commercial real es- tate (CRE) market
dense population centers and aging suburban corridors. The state is experiencing
MEDICAL STATS BY COUNTY
enters 2026 facing con- strained sup- ply, steady demand, and an ongoing shift toward outpatient care. These trends are
a bottleneck in Class A medical space, with limited new cons t ruc - tion con- tributing to constrained supply in key
Darren Lizzack Randy Horning
particularly evident across New Jersey, where limited in- ventory and high occupancy are tightening availability across core submarkets. Following years of elevated borrowing costs and cautious development, medical office building (MOB) construction has dropped to its lowest level in more than a decade. De- spite this slowdown, demand remains strong, supported by the essential nature of health- care services and the continued growth of the 65+ population. Nationally, MOB occupancy remains stable, with vacancy rates between 7% and 9%, while new construction deliv- eries are projected to fall by 26% year-over-year in 2026. This supply-demand imbalance continues to drive rent growth and attract investment capital seeking stable returns. Investment activity is also rebounding, with healthcare systems and investors reposi- tioning portfolios to prioritize outpatient-focused assets and liquidity. New Jersey Spotlight In New Jersey, the shift toward outpatient care is es- pecially pronounced, driven by PHILADELPHIA, PA — CBRE facilitated the sale of the Stone Manor MOB, a 62,750 s/f medical outpatient building (MOB) and ambula - tory surgery center located at 2800 Kelly Rd. in Warrington, to Cornerstone Companies. Chris Bodnar, Bran- nan Knott, Zack Holder- man, Anthony Sardo, Cole Reethof and Jesse Greshin of CBRE U.S. Healthcare Capital Markets partnered with Tom Stone, Doug Ro- dio, Bruer Kershner and Jerry Kranzel o f CBRE’s Radnor/Philadelphia health- care leasing team to act as the advisors to the seller, Carlino Commercial Development .
healthcare hubs such as New Brunswick, Hackensack, and Cherry Hill. As a result, pre - mium assets are commanding significant rent and pricing premiums. New Jersey continues to lead in adaptive reuse strate- gies, with healthcare provid- ers repurposing vacant retail centers, big-box properties, and traditional office space into multi-specialty medical facilities. At the same time, consolidation across health systems is influencing real estate decisions, as providers look to improve efficiencies and offset rising labor costs. Despite broader national headwinds, New Jersey re- mains a target market for expansion, particularly in high-income northern and central submarkets where providers are seeking to grow market share. Northern New Jersey by the Numbers (Q1 2026): • Total sales: 38 transactions • Total sales volume: $49.0 million • Total sales square footage: 312,003 s/f • Total lease transactions: 109 • Total lease square footage:
233,555 s/f Average asking rent: $24.79 psf Across the region, MOB occupancy ranges from ap- proximately 94.5% to 96% in core submarkets, while new inventory growth remains be- low 1%. Rent growth continues to climb, particularly in high- demand corridors. With ground-up development limited, adaptive reuse has become a primary strategy. Healthcare providers are in- creasingly moving into former retail corridors throughout Bergen, Monmouth, and Cam - den counties. New projects are also requiring significant pre-leasing, often reaching 80% to 100% occupancy before construction begins. Looking Ahead As the market moves into the remainder of 2026, several factors are expected to shape the healthcare CRE landscape.
Providers unable to secure traditional medical office space will continue migrating toward retail storefronts, re- sulting in more complex lease structures and specialized infrastructure requirements. At the same time, economic uncertainty and expectations that interest rates may remain elevated into late 2026 are likely to keep development activity constrained. Investment in building technology is also increas- ing, with a focus on smart medical office buildings that integrate telehealth capa- bilities and advanced patient flow systems to maximize operational efficiency. Regulatory pressures and cost concerns are expected to drive further emphasis on outpatient care delivery, as providers shift services away from hospital campuses and for repositioning strategies where the underlying physical and locational fundamentals already exist. Erica Davidson is a direc- tor with the Healthcare Brokerage division at Lee & Associates New Jersey, advising healthcare pro- Stone Manor MOB is located along Kelly Road, less than one mile from U.S. Route 611 , pro- viding strong visibility and con- venient access to major Phila- delphia corridors including I-276
into more cost-effective, com- munity-based settings. The market is expected to remain bifurcated, with large health systems continuing to expand their outpatient footprints, while smaller and independent practices face increasing competition for high-quality space. As a result, early lease renewals, strategic site se- lection, and access to well- located assets will become increasingly critical. In New Jersey, the flight to quality may evolve into a broader scramble for space as supply remains constrained. About the Report This analysis reflects Q1 2026 trends in the healthcare real estate sector, including supply constraints, invest- ment activity, and regional performance across key Mid- Atlantic markets. MAREJ
CBRE facilitates sale of MOB & ambulatory surgery center in Philadelphia MSA and I-476. The property serves the Philadelphia MSA and ben - efits from a highly affluent area, with average household income of $169,857, accelerating senior population growth (12% 65+ population growth), and more than 234,000 residents within a seven-mile radius. MAREJ orthopedic, pain management, sports medicine, podiatry and ENT surgeries.
NJ isn’t building medical office like . . . continued from page 7
viders, property owners, and investors throughout New Jersey. Adam Tannenbaum is an associate director with Lee & Associates New Jersey focusing on health- care real estate and medi- cal office strategy across New Jersey. MAREJ
2800 Kelly Rd.
Stone Manor MOB is a class A surgery and dialysis center located in the Warrington sub- market of Philadelphia. The fa- cility was built in 2007 and was 93% leased at the time of the
sale with 9.8 years of WALT. It features a multi-specialty, high- volume ASC with two operating rooms and one treatment room to perform hand and upper extremity, joint replacement,
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