How have rising construction costs affected rents? Revista’s construction data continues to show increases in the cost of building an MOB. The average cost per square foot came in at $549 for completed MOBs in 2024. That is a 12% increase year-over-year. The chart below compares the average triple-net rents (asking rents) for newly constructed MOBs vs. the rest. In this dataset, new construction is defined as having finished construction within the prior 2 years. The growth over the past 7 years has been significantly higher for new construction. New construction rents grew 30%, from $26.39 to $34.48. Existing properties grew 15% over that same period, from $22.03 to $25.31. This is made clear by looking at the gap, which was around $5 in 2018, and hit $9 at the end of 2024. As the rents required for a profitable development climb, it contributes to the decreasing trend for new MOB projects that has been going on since 2022.
