Medical Pavilion I & II offers 190,000 s/f of class A space as regional vacancy tightens

NATIONAL HARBOR, MD — Surging outpatient demand is tightening medical office markets nationwide as construction pipelines stall and federal policy accelerates the shift from inpatient care.

Washington, DC’s medical office market reflects that trend, according to CoStar Group, with vacancy nearly 6.5 percentage points below the region’s traditional office market. Vacancy for multi-story, multi-tenant class A medical office buildings also improved, declining from 14% to 13.5%.

National Demand Accelerates

National outpatient occupancy topped 92.5% in the first quarter of 2026 while new medical office construction remained near historic lows, according to Cushman & Wakefield and JLL. At the same time, federal policy continues shifting care to outpatient settings, prompting health systems to expand capacity despite capital constraints.

“What we’re seeing in Washington, DC is a local reflection of a national trend,” said Peter Papantoniou, principal at Gittleson Zuppas Papantoniou Medical Realty, leasing broker for Medical Pavilion I & II at National Harbor. “Outpatient demand is growing faster than new supply, keeping vacancy low and rents strong.”

“Our investment strategy has always focused on creating long-term healthcare destinations,” said Malika Peltier, managing director at Rethink Healthcare Real Estate. “National Harbor combines modern medical facilities, strong health system partnerships, accessibility and a growing patient population, positioning the campus to benefit from the continued migration of outpatient care.”

Washington, DC Market

CoStar reports Washington-area medical office vacancy held at 11.7% during the first quarter of 2026 while rents rose 1.9% over the previous year, outpacing the broader office market. Health systems are also seeking larger multi-specialty clinics, increasing demand for modern class A outpatient space.

Medical Pavilion I & II offers more than 190,000 rentable s/f of class A medical office space in National Harbor, with built-out suites, structured parking, direct transit access and the ability to accommodate large healthcare users.

The campus also benefits from National Harbor’s dining, hospitality, retail, parking and transit amenities, creating a convenient environment for patients, employees and healthcare providers alike.

“Not all medical real estate is created equal,” Papantoniou said. “Medical Pavilion I & II offers the quality, visibility and accessibility providers are seeking.”

National Harbor continues to attract investment, including the planned East Coast Sphere entertainment venue and a $720 million mixed-use development that will add housing, retail and office space, expanding the area’s residential population and future patient base.

As healthcare providers continue expanding outpatient services throughout the Washington metropolitan area, Medical Pavilion I & II remains one of the region’s few opportunities to secure large-format class A medical office space in a growing mixed-use district.