Arizona’s Booming Medical Office Marketplace

Arizona’s booming population, aging demographic, and expanding healthcare demands are creating a critical need for purpose-built medical office space. The Phoenix metro — the state’s population hub of nearly 4.85 million — is already experiencing surging demand.

Three key drivers underscore this trend:

  1. Demographic shifts
    With Baby Boomers fully retiring and more seniors relocating to Arizona, outpatient healthcare usage is rising sharply. The 65+ population in the state grew more than three times faster than overall population growth, fueling stronger medical real estate demand.

  2. Decentralization of care
    Healthcare providers are moving beyond hospital campuses into residential corridors. Over 297,000 square feet of medical office buildings are under construction in the Phoenix area alone, especially in fast-growing submarkets like the Southwest Valley, Buckeye, Queen Creek and others.

  3. Investor and developer interest
    Commercial real estate investors are pivoting from multifamily to medical properties, drawn to long-term leases, resilient demand, and higher cap rates. Despite construction cost challenges (material and labor inflation), strategies like gray‑shell delivery, modular design, and adaptive reuse are keeping projects viable.

Arizona’s continued population growth, demographic changes, and evolving care delivery models will drive long-term demand for medical office space. Developers, investors, and healthcare providers should prioritize well-located, flexible, and efficient MOBs — especially in emerging suburban and rural markets — to meet future patient care needs.

PLAZA COMPANIES IS THE PREMIER CHOICE IN MEDICAL OFFICE REAL ESTATE

Plaza Companies is a full-service real estate firm specializing in the leasing, management, construction, and development of some of the most innovative medical office and commercial real estate projects in Arizona.  Our firm specializes in staying connected and conscientious of all emerging trends in commercial real estate. Contact us today to learn more about leasing the right space or anything else we offer!

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Whether you are looking to us for management, leasing or development services, we can help you find the perfect space. With over 40 years of experience, you can trust Plaza Companies to assist you with your real estate needs.

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