Richmond’s medical office market fundamentals remained strong through the second half of the year with sustained demand from occupiers and investors alike. The construction pipeline is limited as strategic development activity remains focused on the high-growth corridors and select redevelopment of well-located infill sites.

Key takeaways:

→ Overall vacancy dropped to 8.5% in the fourth quarter, down 150 bps year-over-year.

→ Annual leasing activity exceeded 290,000 sf with a surge of activity in the fourth quarter.

→ Sales volume topped $351.3 million for 2025, including AW Real Estate Management’s $171 million acquisition of a six-building 415,407-sf portfolio from Healthcare Realty Trust.

→ The construction pipeline has substantial preleasing in place with sustained demand for new product. More than 480,000 sf has been delivered since 2022 with new product vacancy at 15.8% (down 280 bps year-over-year).