Medical Office Real Estate in Richmond, VA

Cap rates for medical office properties in Richmond vary by submarket, property class, and occupancy levels. The overall Richmond market average cap rate is approximately 6.5%. 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.

Richmond is approximately 100 miles south of DC, close enough for some commuters and for businesses seeking a lower-cost alternative with access to the federal market. Remote workers earning DC-area salaries while living in Richmond support premium apartment rents. Some federal contractors and technology companies have established Richmond offices for employees who relocated. However, Richmond is far enough from DC to maintain its own distinct identity and economic base.

The combination of VCU's urban campus, the brewery and restaurant scene in Scott's Addition and Shockoe Bottom, and a growing creative economy have attracted young professionals and transformed previously overlooked neighborhoods. Capital One's expansion in the metro and CoStar Group's new headquarters (relocated from DC) have added corporate anchor tenants. The relatively low cost of living compared to DC and other East Coast cities makes Richmond attractive for both employers and workers.