Austin, TX Medical Office Market Report Q2 2026
Austin’s medical office market continued to demonstrate stable fundamentals in Q2 2026, supported by consistent demand for outpatient care and physician services. Leasing activity remained healthy across both established medical districts and emerging healthcare corridors, helping the market maintain positive absorption. Rent growth moderated but remained positive, reflecting balanced market conditions and steady tenant demand. Existing properties also benefited from a limited supply of new competitive space, allowing well-located assets to maintain healthy occupancy. Investor interest remained resilient, with medical office continuing to stand out as one of the region’s more stable commercial asset classes. As Austin’s population continues to grow, the sector remains well positioned for sustained long-term performance.
Key Findings
- Clinical Demand Remains Strong: Austin’s medical office sector continues to outperform the broader office market, supported by stable healthcare demand, strong occupancy, and resilient leasing activity across the metro.
- Expansion Moves Outward: Healthcare providers continue expanding into Austin’s fastest-growing suburbs, with Cedar Park, Round Rock, and Georgetown remaining focal points for new clinical space.
- Constrained Development Pipeline: Limited new construction is reducing future competitive supply, helping support healthy occupancy levels while creating favorable conditions for continued growth in asking NNN rents.
Austin Demographics
Source: U.S. Bureau of Labor Statistics
- Unemployment Rate: 3.5%
- Current Population: 2,620,945
- Households: 1,061,155
- Median Household Income: $99,897
Austin Medical Office Rents
Average asking rent reached $38.10 per SF in Q2 2026, continuing a trend of stable pricing across Austin’s medical office market. While rent growth has moderated, landlords have generally maintained pricing power due to consistent healthcare demand and healthy occupancy. Limited new development has also reduced competitive pressure, supporting gradual growth in asking NNN rents.
Market Asking Rent Per SF
Source: CoStar Group, Inc.
Austin Medical Office Vacancy
Vacancy measured 10.3% in Q2 2026, reflecting a healthy balance between tenant demand and available supply. Leasing activity remained steady throughout the quarter, allowing the market to continue absorbing available space. While vacancy may fluctuate as tenants relocate or expand, the limited pipeline of new development is helping prevent significant upward pressure.
Vacancy Rate
Source: CoStar Group, Inc.
Austin Medical Office Construction
Construction activity remained limited in Q2 2026, with 228,685 SF under construction and just 54,580 SF delivered during the quarter. Elevated construction costs and tighter financing conditions continue to restrain new development, keeping the pipeline below historical levels. The lack of significant new supply is helping existing properties maintain healthy occupancy while supporting stable market fundamentals. As a result, Austin’s medical office market remains well positioned for measured, long-term growth.
SF Under Construction
Source: CoStar Group, Inc.
Sales
Sales activity remained active in Q2 2026, with 29 transactions recorded at an average sale price of $291 per SF. Investor demand for Austin’s medical office sector remained steady, supported by the asset class’s resilient operating fundamentals and stable occupancy.
Medical office continues to attract buyers seeking defensive investments, particularly as broader office market conditions remain challenged. Overall, transaction activity reflects continued confidence in the sector’s long-term performance and growth prospects.
Austin Medical Office Cap Rate
Source: CoStar Group, Inc.
By the Numbers
Q2 2026 | Source: CoStar Group, Inc.
- # of Sales: 29
- Price Per SF: $291
- Vacancy Rate: 10.3%
- Rent Growth (YOY): 1.4%
- Asking Rent Per SF: $39.43
- SF Under Construction: 228,685
- SF Delivered: 54,580
- SF Absorbed: 87,513
