If you’ve been sleeping on medical office in Phoenix, Q4 just slapped you awake. While everyone else is busy arguing about industrial caps or whether multifamily has finally hit bottom, medical office has been quietly doing what it always does in the Valley: performing.
And this quarter? It didn’t just perform — it flexed.
Colliers said it best in their Q4 report:
“Medical office sales volume reached its highest level since Q1 2022.”
That’s not a small statement. That’s a market telling you, loud and clear, that capital is coming back.
🔥 Investors Are Back — And They’re Paying Up
Sales volume didn’t just rise — it exploded.
According to the report:
“Sales volume increased 207.7% quarter over quarter and 42.2% year over year to $141.3 million.”
And pricing followed. Average price per square foot jumped to $362.40, up 84.8% QoQ and 40.3% YoY.
Translation: Investors aren’t just dipping their toes back in — they’re diving in headfirst.
Why? Because medical office is one of the few asset classes in Phoenix that still has:
- sticky tenants
- recession‑resistant demand
- long‑term leases
- and zero dependence on return‑to‑office drama
It’s the opposite of office volatility. It’s stability with upside.
📈 Leasing Rebounded — Demand Is Real
After a slower period, Q4 snapped back with +143K SF of net absorption.
Colliers notes:
“Leasing activity picked up again in 2025, showing that demand for medical office space in Phoenix remains solid.”
This is what makes MOB so underrated — even when the broader office market wobbles, healthcare keeps expanding. People don’t stop needing care. Providers don’t stop growing. And Phoenix — with its population boom and aging demographics — is a perfect storm of demand.
🏢 Vacancy Keeps Trending Down Long‑Term
Yes, vacancy ticked up 10 bps from Q3. But year over year? It dropped 60 bps to 12.8%.
And the long‑term story is even stronger:
“Vacancy has dropped by over 700 basis points since 2010.”
That’s a decade‑plus of structural improvement — not a quarterly blip.
Submarket highlights:
- Southwest Valley: lowest vacancy at 6.0%
- Airport Area: biggest improvement, dropping 7.2% QoQ and YoY
- Northeast Valley: highest vacancy at 14.6%, but also home to the highest‑end inventory
This is a healthy, balanced market — not overheated, not distressed.
💵 Rents Are Holding Strong (and Rising)
Overall asking rent held steady at $26.36 NNN, but rose 2.6% YoY.
Every submarket posted positive annual rent growth — and some crushed it.
The report highlights:
“The Southeast Valley led with 11.8% year‑over‑year rent growth.”
And the Southwest Valley continues to command the highest rents at $32.18 NNN.
When rents rise across every submarket, that’s not noise — that’s strength.
🏗️ Construction Is Tight — Which Is Good for Owners
Only one new MOB delivered this quarter — a 14,100 SF building in Buckeye.
But here’s the important part:
“Projects under construction increased… totaling 230,482 square feet.”
Developers are cautious but confident. Supply is limited, demand is steady, and that’s exactly the environment where rents and values stay firm.
🔮 The Outlook: Stability + Growth = Opportunity
Colliers wraps the report with a clear message:
“Arizona’s healthcare real estate market closed Q4 2025 on increasingly solid footing.”
And they’re right.
Phoenix has:
- population growth
- aging demographics
- a shift toward outpatient care
- limited new supply
- rising rents
- and renewed investor appetite
That’s not just stability — that’s a runway.
💬 Final Take
Medical office isn’t flashy. It’s not the asset class influencers are hyping on TikTok. But in Phoenix? It’s one of the most consistent, resilient, and quietly profitable corners of the entire commercial real estate landscape.
Q4 didn’t just prove it — it made it impossible to ignore.
If you’re looking for an asset class that actually behaves like the fundamentals say it should, MOB is right there, waving at you. And just so nobody goes down a Tupac‑era rabbit hole on Google — MOB here means Medical Office Buildings, the most slept‑on asset class in the Valley.
AriZona Real Estate insider! 
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