2025 Healthcare Real Estate Outlook: Outpatient Growth and Investor Opportunity

The U.S. healthcare property market is entering a defining moment. With aging demographics, rising healthcare spending, and a push toward outpatient care, medical office buildings (MOBs) continue to outperform other office asset classes — offering investors stability and long-term upside.

1. Aging Demographics Driving Demand

By 2030, nearly one in five Americans will be over 65, fueling healthcare spending that already accounts for more than a third of total U.S. outlays. That translates directly into higher demand for accessible, modern outpatient facilities. MOBs remain a core beneficiary, supported by consistent rent growth and tightening vacancies below 10%.

2. Outpatient Care Takes the Lead

Health systems are shifting away from high-cost hospital campuses toward decentralized outpatient and surgical centers. About 80% of new MOB projects are now off-campus — often located in residential or retail corridors that improve patient access. Meanwhile, larger on-campus facilities continue to attract anchor tenants and system-affiliated practices.

3. Technology and Labor Shape Facility Design

Persistent staffing shortages and rising labor costs are pushing providers to embrace automation, telehealth, and AI-driven documentation. The next generation of MOBs will need to support flexible layouts, digital infrastructure, and operational efficiency — all key differentiators in leasing and asset performance.

4. Market and Capital Trends

Rents for MOBs rose about 1.5% year-over-year to roughly $25 per sq. ft., while cap rates have compressed to around 6.9% — the first decline since 2022. Transaction volume climbed roughly 60% in Q2 2024, signaling renewed investor confidence. Institutional buyers continue to target healthcare real estate for its resilient income streams and defensive profile.

5. Key Markets to Watch

Boston, Houston, and Dallas lead the nation in medical office absorption, while growth corridors like Orlando, Phoenix, and Atlanta are seeing robust outpatient development.

Summary

Healthcare real estate remains one of the most durable and strategically positioned sectors going into 2025. Investors and operators who align with outpatient expansion, workforce adaptability, and technology-ready facilities will capture both near-term returns and long-term value.