What is a fair triple-net (NNN) lease rate for medical office space?

Base rent for medical office space is the headline number, but it tells you less than half the story. To compare deals honestly, always work in all-in occupancy cost per square foot per year, which is base rent plus the NNN load (real estate taxes, building insurance, and common area maintenance, often abbreviated CAM). In most U.S. metros, suburban Class B medical office trades in the mid-$20s to low-$30s base rent per square foot, with NNN reimbursables adding another $6 to $10. Class A and on-campus medical office runs higher, often into the high-$30s to mid-$40s base, with NNN loads in the $8 to $14 range because taxes and CAM on newer buildings are higher. Major-metro urban product (Manhattan, San Francisco, Boston, downtown Los Angeles) trades well above these ranges. Beyond geography and class, five factors drive your specific deal. First, tenant improvement (TI) allowance. A landlord offering $80 per square foot of TI on a 10-year deal is effectively financing your build-out into the rent; a deal with $20 TI looks cheaper on paper but you absorb the build-out yourself. Second, lease term. Ten years is the medical office norm because clinical build-out depreciates over that horizon. Longer terms (12 to 15 years) typically get lower base rent and more TI. Third, escalators. Annual increases of 2.5 to 3.5 percent are standard. A flat-rate escalator at 3 percent compounds to roughly 34 percent over 10 years, so the year-one rate undersells the lifetime cost. Fourth, free rent. Three to nine months of abatement during build-out is common; convert that to an effective rate by amortizing over the term. Fifth, the operating expense pass-through itself. Insist on a base-year cap or expense stop on controllable CAM, audit rights, and exclusions for capital expenses (the landlord should not be passing through a new roof to you). Medical-specific considerations: confirm the landlord permits your clinical use (radiology, surgical, infusion, behavioral health each have different building requirements), exclusive use clauses to prevent direct competitors from leasing adjacent suites, and parking ratios appropriate for patient volume (most healthcare needs 5 to 6 spaces per 1,000 square feet, higher than general office). Get the deal abstracted by a healthcare-experienced tenant rep, not a general office broker.