Colliers Texas

Limited construction is keeping medical office building (MOB) vacancy low: high borrowing and building costs have slowed new supply, while demand has remained steady. Construction has slowed since 2022. From 2016–2022, annual construction activity averaged roughly 1.6% of existing inventory. In the 12 months through Q3 2026, completions represented just 1.0% of inventory, and new starts represented 1.1%. Occupancy remains high. Across the top 100 metropolitan markets combined, occupancy has stayed above 92% for three years, equivalent to vacancy below 8%. Even the lowest-occupancy markets within that group sit around 87%.

DFW office fundamentals kept improving in Q3, but more slowly. Vacancy fell slightly, rents rose again, and new supply nearly stopped. Absorption, however, was well below last year’s pace. Vacancy: This is the second straight quarter below 20%. Before Q2 2026, the market hadn’t been under that level since Q2 2023. Absorption: Class A accounted for about 337k SF of the 384k SF total. Year-to-date absorption is 1.65M SF, roughly half of the 3.2M SF at this point in 2025. Rents: Asking rents have risen four quarters in a row, from $32.40 in Q4 2025, for a gain of about 6% year over year. Class A averages $39.31, Class B $25.45 and Class C $22.39. Sublease and availability: Sublease availability fell to 2.0% (6.5M SF), down from 2.6% a year ago. Total availability is 21.1%.

Austin’s office vacancy rose to 21.1% in Q3, even as net absorption stayed positive for a sixth straight quarter. New Supply: Q3 saw the addition of 730,000 square feet to the CBD inventory with the delivery of Waterline. Net Absorption: The market extended its streak of positive net absorption to six consecutive quarters. Overall Vacancy: The vacancy rate ticked up to 21.1%, but remained below the peak level reached in Q3 of the prior year. Asking Rents: Average asking rents eased to $44.14 per square foot. Austin’s office market continued to demonstrate resilience in Q3 2026, supported by positive net absorption, active leasing, and new Class A supply. The delivery of the 730,000 square foot Waterline development in the CBD, the quarter’s only new supply addition, drove much of the quarter’s movement, pushing vacancy slightly higher to 21.1% and raising Class A pricing. At the same time, continued tenant demand kept net absorption positive, and overall asking rents adjusted to $44.14 per square foot. Austin’s long-term outlook remains supported by its growing technology and innovation sectors, which continue to reinforce the city’s appeal as a business destination. As leasing momentum builds and businesses evaluate expansion opportunities, the office market remains positioned for continued improvement in the quarters ahead.

MOB occupancy across the top 100 metros is holding at 92.2% (3Q 2026). Flat vs. 1Q 2026 and up 10 bps year-over-year. What’s driving the tightness: → Renewal rates generally above 80% → New supply growing at only ~1% → Ambulatory healthcare employment up ~2.4% Limited options for physician groups and health systems looking to expand.

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