MOB construction has been slower than usual in 2025. Less projects are breaking ground than are completing, so the pipeline has been shrinking. In recent times, inventory has typically grown around 1.5% annually. Over the past year MOB inventory has grown 1.3% and the amount of new construction is equivalent to only 1% of existing inventory.
Given the challenging development environment, are there any changes to the type of project breaking ground? Here we are looking at one attribute, a projects proximity to a hospital. Each project is categorized into four distance groups. A standout point is the higher percentage of MOB developments are farther away from a hospital campus over the past year and a half. The 2025 numbers represent up through the middle of May. 13% of the MOBs that broke ground in 2024 and 12% so far in 2025 have been greater than 5 miles away from a hospital campus. That percentage is typically 7-8%, so it provides some evidence of the demand for more accessible outpatient care. Providers are extending their presence deeper into communities as that is where there are a lot of growth opportunities.
