NAI Martens MEDICAL
Mid-Year Report
Key Takeaways
Overall vacancy rates decreased to 7.15%
Asking rental rates had slight decline to $15.09 psf
Absorption for the year increased to 123,046 SF Artists rendering of the interior of the
Wichita’s Medical Office Market Strong at Midyear
Wichita’s medical office market continued to improve through the second quarter of 2024. Vacancy rates fell to 7.15% overall, in comparison the “traditional” office vacancy rate rose slightly to 26.6%. The weighted average rental rate slightly declined to $15.09 PSF.
Construction and Infrastructure
The healthcare real estate sector has adapted to evolving industry demands, particularly the shift toward outpatient care and ambulatory services, which has created a need for modern, flexible healthcare facilities
A growing trend involves repurposing existing spaces to accommodate outpatient services, reducing reliance on traditional hospital settings Over the next decade, surgical procedures are expected to increase by at least 25% at ambulatory surgery centers and 18% at both hospital outpatient departments and physician offices.
Northwest Wichita has seen a great deal of medical office growth, with new medical development going up at 29th and Maize, Maple and 135th and The Office Park at Eberly Farm On the East side the former Opti-Life building was purchased by the founder of Mid-America Orthopedics, with plans to renovate it into Class A medical space Further East, Andover is seeing construction on a new emergency room location and Andover Family Optometry is opening new offices at The Heritage development.
Ground has broken on the 350,000 SF phase 1 building of the Wichita Biomedical Campus. While it is not expected to open until 2027, the Campus’s potential impact on the medical office sector is being felt with recent purchases of the nearby Kress Energy Center, Petroleum Building and the McClellan Hotel Building, all of which are expected to attract medical and traditional office users
Behavioral Health Demand
Demand for behavioral health services has increased dramatically over the past 5 years, accelerated by the COVID-19 pandemic. Mental health experts expect demand to rise further in 2024 in the months surrounding the election.
This growing demand has attracted significant investment interest in the behavioral health sector, and as providers seek to expand or relocate to better serve their patients, real estate requirements also increased
We have seen this trend reflected in Sedgwick County with COMCARE of Sedgwick County Children’s Services signing a 35,000 SF lease in the Brittany Center in northeast Wichita. COMCARE will be keeping a downtown presence adjacent to the Wichita Biomedical Campus at 235 S. Topeka, which will be renovated and used for other programs outside of children’s services, including the Community Crisis Center
MID-YEAR TOP LEASES
MID-YEAR TOP UNDER CONSTRUCTION
