By eporter on August 30, 2025
|
Demand for healthcare space remains structurally strong, underpinned by demographic tailwinds, the continued shift of care delivery to outpatient settings, and health system strategies to expand local networks closer to the patient base. Occupancy levels remain high relative to other property types, and rental growth, while moderate, is consistently positive, driven by limited new supply and stable tenant demand.
Compared with broader office, retail, and industrial markets, healthcare real estate demonstrates greater predictability. General office continues to grapple with elevated vacancies and tenant downsizing, while retail and industrial, though healthy, show more cyclical variability. By contrast, HCRE benefits from sticky tenancy, long lease durations, and credit backed rental streams, making it an increasingly favored defensive allocation for institutional and private investors alike.
|
|
|
After expanding meaningfully in 2022–2023, cap rates have largely stabilized, with high quality MOBs trading in a narrower band. Core, on campus and health system anchored assets are beginning to see firming pricing, with potential for modest compression if rate cuts materialize in H2 2025.
|
|
|
HCRE fundamentals remain exceptionally strong, driven by demographic growth, aging populations, and the ongoing migration of care from inpatient hospitals to outpatient settings.
The sector’s resilience, income stability, and defensive characteristics continue to attract diversified capital allocations and position it as one of the top performing asset classes in 2025 and beyond.
|
|
|
Stabilized rates and tighter credit spreads are narrowing bid ask gaps and enabling cleaner underwriting. Quality, cash flow durable assets (credit tenancy, on campus or hospital adjacent locations, long remaining term, and escalations) command the most attention.
|
|
| Houston Physicians’ Hospital
130,822 RSF | Houston, TX |
|
| Specialists Hospital Shreveport
207,714 RSF | Shreveport, LA |
|
| Dignity Health General Hospital
38,900 RSF | Phoenix, AZ |
|
UNC Health Rex MOB
Chapel Hill
14,159 SF | Chapel Hill, NC |
|
| Kansas Spine & Specialty Hospital
72,628 RSF | Wichita, KS |
|
| GI Alliance MOB/Lonestar Endoscopy ASC Portfolio
27,793 RSF | Southlake, TX |
|
|
HREA | HEALTHCARE REAL ESTATE ADVISORS is a national leader in advising healthcare providers and real estate owners with various monetization strategies, including disposition, debt & equity recapitalization, and tax-deferred structures, such as the Hybrid Sale-Leaseback®, §1031 Exchange, and UPREIT.
HREA’s capabilities also include providing physician-led healthcare groups with 100% non-recourse financing for new development and expansion, as well as monetizing surplus and non-essential real estate assets.
HREA’s advisory team has completed over $4 billion of healthcare real estate sale transactions throughout the U.S. With an exclusive focus on healthcare real estate, HREA has a unique perspective of this rapidly evolving industry that provides solutions customized to each client’s goals and objectives.
|
|
![]() |
The full content of this article is only available to paid subscribers. If you are an active subscriber, please log in. To subscribe, please click here: SUBSCRIBE
Posted in Thought Leaders
