Medical Office Real Estate in Raleigh, NC

Cap rates for medical office properties in Raleigh vary by submarket, property class, and occupancy levels. The overall Raleigh market average cap rate is approximately 5.7%. Class A properties typically trade at lower cap rates than value-add opportunities.

Healthcare demand is driven by demographics (aging population) and medical necessity rather than economic conditions. People require medical care regardless of the economic environment, and the shift toward outpatient care continues to accelerate. Medical tenants have long lease terms, high renewal rates, and significant buildout costs that make relocation unattractive. These factors combine to produce stable occupancy and rent collection even during economic downturns.

On-campus MOBs are located on or immediately adjacent to a hospital campus, benefiting from direct referral traffic, shared services, and the hospital system brand. They typically command lower cap rates (4.5-5.5%) due to perceived stability. Off-campus MOBs are standalone or in medical parks away from hospitals, typically trading at higher cap rates (5.5-7.0%) but offering potentially higher returns. Off-campus properties may have more diverse tenant bases and less dependence on a single health system.

The Triangle has the third or fourth largest concentration of life sciences employment in the US, behind Boston and the Bay Area and competitive with San Diego. Key advantages include significantly lower operating costs, proximity to three major research universities, and a deep STEM talent pool. Lab and R&D rents are a fraction of Cambridge/Kendall Square pricing, which increasingly attracts companies seeking to stretch their research budgets.

RTP has undergone a generational reinvention. The traditional campus-style office park model was losing appeal, but the Hub RTP redevelopment has introduced walkable mixed-use elements, and major employers continue to maintain large campuses. Apple's planned $1 billion campus in the Triangle validates the region's ongoing attractiveness. The park's large parcels provide development flexibility that downtown locations cannot match.