Phoenix Medical Office Market Report, Q3 2026
A summary of the Maris Advisors Q3 2026 Phoenix Medical Office Market Report: the headline figures, the quarter in review and the notable deals. The full report is available on request.
Headline Figures
Executive Summary
Phoenix medical office direct vacancy stands at 15.2%, up 10 basis points on the quarter, with total availability at 18.5%. Average direct asking rent is $34.21 per square foot on a full-service basis, down $0.18 on the quarter and about 5% above a year ago.
Net absorption was positive for a second straight quarter at about 38,800 SF, down from about 60,100 SF in the second quarter, with most of the gain coming from sublease space. Leasing totaled about 146,000 SF across 46 deals — slightly more deals than last quarter, but smaller ones.
No new medical office space delivered for the second straight quarter, and the roughly 405,000 SF under construction is unchanged. With little new supply arriving and health systems building their own outpatient campuses, well-located existing space holds the advantage.
Sales slowed to about $64 million after a $152 million second quarter, on more trades at smaller price points; year-to-date volume is near $300 million.
Quarter in Review
Ownership turned over across the sector: two inpatient rehabilitation hospitals in Surprise and Mesa traded for $57 million combined, Lincoln Property Company and PGIM made their first metro Phoenix healthcare purchase with a Banner-leased surgery center in Mesa, and Albany Road Real Estate Partners financed its purchase of Edwards Professional Park in Scottsdale. New construction kept to committed projects — medical condominiums in Queen Creek and a 32,000 SF addition at Banner Ironwood Medical Center.
Quarter Comparison
| Metric | Q3 2026 | Prior Qtr |
|---|---|---|
| Direct Vacancy | 15.2% | 15.1% |
| Net Absorption | 38,800 SF | 60,100 SF |
| Development Pipeline | 405,000 SF | N/A |
| Avg Asking Rent (Full Service) | $34.21/SF FSG | $34.39/SF FSG |
| Preleasing | N/A | N/A |
Submarket Performance
| Submarket | Direct Vacancy | Asking Rent | Net Absorption |
|---|---|---|---|
| Arrowhead | 9.8% | $36.45/SF FSG | -17,900 SF |
| Camelback Corridor | 7.9% | N/A | -1,940 SF |
| Central Scottsdale | 26.6% | $34.30/SF FSG | -56,200 SF |
| Chandler | 11.6% | $37.30/SF FSG | -9,100 SF |
| Deer Valley/Airport | 22.2% | $30.58/SF FSG | -3,770 SF |
| Gateway Airport/Loop 202 | 11.4% | $52.04/SF FSG | +29,400 SF |
| Glendale | 5.3% | $40.90/SF FSG | +3,520 SF |
| Loop 303/Surprise | 7.1% | $32.43/SF FSG | +23,500 SF |
| Midtown | 14.8% | $25.60/SF FSG | +46,100 SF |
| Midtown/Central Phoenix | 16.2% | $28.09/SF FSG | -37,800 SF |
| Northwest Phoenix | 22.9% | $22.56/SF FSG | +53,100 SF |
| Paradise Valley | 17.8% | $32.45/SF FSG | -6,820 SF |
| Scottsdale Airpark | 8.7% | $40.95/SF FSG | +6,100 SF |
| Scottsdale South | 4.7% | $29.93/SF FSG | +1,700 SF |
| South Tempe/Ahwatukee | 16.4% | $29.68/SF FSG | +963 SF |
| Superstition Corridor | 21% | $36.66/SF FSG | -26,700 SF |
| West I-10 | 8.3% | $44.43/SF FSG | +16,300 SF |
Notable Deals
Notable Sales
- Gupta Property Ventures Inc · 7525 E. Broadway Rd., Mesa · Mesa (Southeast Valley) · 20,500 SF
- — · 15800 N. Litchfield Rd., Surprise · Surprise (Northwest Valley) · 26,200 SF
- Albany Road-Edwards LLC (Albany Road Real Estate Partners) · 10752 N. 89th Pl. & 8952 E. Desert Cove Ave., Scottsdale (Edwards Professional Park) · Central Scottsdale · 82,100 SF
- Hartford8665, LLC · 8665 & 8667 E. Hartford Dr., Scottsdale (One Scottsdale Landing) · Scottsdale Airpark · 121,000 SF
- MCR 5891 Glendale, LLC (MCR Companies) · 5891 W. Eugie Ave., Glendale · Deer Valley/Airport · 35,800 SF
- MCR 1717 Chandler, LLC (MCR Companies) · 1717 W. Chandler Blvd., Chandler · Chandler · 18,700 SF
- Empower College Prep · 2302 N. 75th Ave., Phoenix · Glendale · 43,100 SF
Square footage only; every other deal figure stays in the full report.
Who’s Winning, Who’s Losing
Who’s Winning
Owners of well-located existing buildings, with nothing new delivering and little arriving soon. Northwest Phoenix and Midtown led absorption, and Glendale, Loop 303/Surprise and Scottsdale South hold direct vacancy near or below 7%.
Who’s Losing
Multi-tenant buildings in Central Scottsdale, where direct vacancy stands at 26.6% after the quarter's largest give-back of space — and tenants who need new purpose-built space soon, since nothing delivered and most projects wait for committed tenants or strong preleasing before construction starts.
Maris Advisors Market Insight
A full-service medical rent bundles operating costs that run higher than in general office. Set beside a triple-net quote, or an office quote, it misreads both.
The quarter's rent is quoted full service, which folds operating expenses into the face rate. Medical tenants carry heavier utility, HVAC and after-hours loads than general office users, so the expense share inside a full-service medical rent is larger and less predictable. The concession package still decides the deal: tenant-improvement capital, abatement and a separate rent-free build-out period, recovered through terms of seven to ten years or more.
Questions and Answers
What was the direct vacancy rate for Phoenix medical office space in Q3 2026?
Direct vacancy was 15.2% in Q3 2026.
How much net absorption did the Phoenix medical office market record in Q3 2026?
Net absorption was 38,800 SF in Q3 2026.
How did direct vacancy compare with the prior quarter?
Direct vacancy was 15.2% in Q3 2026, against 15.1% in Q2 2026.
Which submarket posted the lowest direct vacancy?
Scottsdale South posted the lowest direct vacancy in the submarket table for Q3 2026, at 4.7%.
Where can I get the full Q3 2026 Phoenix Medical Office Market Report?
The full report is available on request from Maris Advisors through the reports page.
The Full Report
The complete Q3 2026 Phoenix Medical Office Market Report, with every table and chart, is available on request from Maris Advisors.