Colliers 2026 Healthcare Marketplace Report
What the 2026 Healthcare Marketplace Report Tells Us About Where Healthcare Real Estate Is Headed
The healthcare industry is undergoing rapid change, marked by significant shifts in care delivery, technology adoption, workforce dynamics, and capital allocation. These forces are disrupting strategies across clinical operations, facility planning, and investment priorities, and emphasizing the need for flexibility, scalability, and data-driven decision-making.
The Colliers Healthcare Services team recently published their 2026 Healthcare Marketplace Report, and it’s one of the more thorough snapshots of where things stand and where they’re going.
Healthcare Is Changing Fast, But MOBs Aren’t Flinching
The broader healthcare industry is in the middle of a pretty significant restructuring. How care gets delivered, how technology fits into clinical workflows, how health systems manage their workforces and their balance sheets, all of it is shifting at once. That kind of change tends to create anxiety across every asset class tied to the sector.
Medical office buildings, though, have largely held their ground. Colliers makes the case that MOBs remain one of the most stable segments in all of commercial real estate, and the data backs that up. Long-term leases, needs-based patient utilization, and sticky tenancy from clinical practices create a combination that’s hard to replicate in traditional office. Health systems and physician groups are still actively rationalizing their real estate, consolidating older space into modern facilities and expanding into high-growth suburban markets, which keeps leasing activity moving in a productive direction.
Six Trends Reshaping the Industry
Before getting into the numbers, it helps to understand what’s driving everything right now.
The biggest force is the continued shift from inpatient to outpatient care. Technological advances and patients’ growing preference for convenience are accelerating this move, with ambulatory surgery centers, urgent care clinics, and specialty outpatient facilities attracting more capital by the quarter.
Right alongside that is the rapid adoption of digital health and AI. Investors and health systems are both leaning into platforms that improve operational efficiency and support clinical decision-making. This isn’t a future trend anymore. It’s happening now, and it’s changing what tenants want in a facility.
Workforce shortages remain a serious problem and aren’t going away anytime soon. Severe clinical staffing constraints are limiting capacity across the board, pushing organizations toward automation and workforce redesign strategies just to keep the lights on.
Consolidation is also accelerating. Providers, payers, and specialty groups are combining at a rapid pace, which is reshaping market dynamics and pushing real estate investors to think carefully about how facility needs will evolve as organizations merge and reconfigure.
Health systems and large investors are simultaneously rethinking their entire real estate footprints, repurposing inpatient space, expanding ambulatory networks, and optimizing their MOB portfolios with a sharper eye on cost and performance.
Finally, rising capital costs and tighter reimbursement are squeezing operating margins, forcing both providers and investors toward more disciplined capital deployment and creative partnership structures.
Vacancy Is Low and Demand Is Still Outpacing Supply
Here’s where the leasing story gets interesting. Vacancy in quality MOBs across the top 100 markets has stayed well below traditional office, sitting at just 7.5% at year-end 2025 after briefly touching a pandemic-era peak of 8.5% in early 2021. The top 50 markets are tracking similarly at 7.7%. Those numbers represent a market that is genuinely undersupplied relative to demand
Since 2021, net absorption has exceeded new deliveries in four of the past five years. In the top 50 markets, demand has outpaced supply by 3.1 million square feet on a cumulative basis. Expand that to the top 100 markets and the gap grows to 4.7 million square feet. For tenants trying to upgrade or expand, that limited availability creates real pressure, often forcing them to either invest heavily in their existing space or compete aggressively for the few good options coming to market.
Rents Are Climbing and That Trend Has Room to Run
Average rents in the top 50 markets have climbed steadily, reaching $26.35 per square foot in 2025, a 17% increase over eight years. The top 100 markets aren’t far behind at $25.79 per square foot, up about 18% since 2018.
The demographic pressure behind this rent growth is only going to intensify. By 2030, when the last of the Baby Boomers reaches retirement age, the 65-plus population will swell to 70 million people. Outpatient volumes are projected to grow more than 10% over the next five years. New, high-quality MOBs are positioned to command meaningfully higher rents than the broader market.
Investment Volume Has Pulled Back, But Appetite Hasn’t
Transaction volume peaked at $17.6 billion in 2022 and came down from there as interest rates rose and capital markets tightened. In 2025, volume came in at $10.6 billion across 731 transactions, down about 12% year over year. Average deal size also compressed, from $17.1 million in 2022 to roughly $14.5 million in 2025, reflecting ongoing price discovery as buyers and sellers continue to work through their respective expectations.
But softer volume doesn’t mean softer conviction. Institutional investors, private equity groups, and healthcare-focused platforms are still highly motivated to put capital to work in this sector.
Capital formation in 2025 was led by well-capitalized institutional players seeking scale and long-duration income, not opportunistic buyers chasing distress.The most significant transaction of the year was the joint venture between Remedy Medical Properties and Kayne Anderson, who announced a deal to acquire the vast majority of Welltower’s MOB portfolio. At least two tranches closed in 2025 with the balance expected to close by mid-2026. That deal made Remedy/Kayne the largest MOB owner in the country. Fengate Asset Management entered the U.S. healthcare real estate market through that same transaction. Meanwhile, Montecito Medical’s 2025 portfolio recapitalization provided exposure to a diversified, physician-aligned MOB portfolio, and the Cleveland Clinic sold over 20 properties to MedCraft in a joint venture with Fengate through a sale/leaseback. Health systems themselves represented nearly 10% of total transaction volume on the buy side last year.
Cap Rates Have Moved, But Context Matters
From late 2022 through year-end 2025, cap rates moved up across the board. The median cap rate reached 7.2% in 2025 (annual average), up more than 56 basis points from 2018. The bottom quartile averaged 8.0% and the top quartile came in at 6.6%. By Q4 2025, each series hit a local high of 8.72%, 7.85%, and 6.98% for bottom, median, and top quartile respectively.
This movement was driven by rising interest rates, wider risk premiums, and the need for valuations to realign with a higher-rate environment. Even fundamentally strong sectors like MOBs weren’t immune to those macro forces. That said, the sector’s leasing fundamentals have not deteriorated, which is exactly why investors with dry powder are watching closely for the right moment to deploy.
San Francisco, Washington DC, Miami, Charlotte, and Tampa were the top five markets by transaction volume in 2025.
What to Watch in 2026
The decentralization of care is one of the most consequential trends shaping healthcare real estate going into 2026. Hospital systems are building closer to where patients live, expanding MOBs, urgent care centers, standalone emergency departments, and ambulatory surgery centers across suburban and community markets. This is great news for MOB demand, though it puts additional pressure on rural healthcare systems, where nearly 14% of hospitals are at risk of closure in 2026.
Outpatient procedure volume is growing fast. Outpatient revenue is now 45% higher than it was in 2020, compared to just 16% growth for inpatient care. Outpatient spine procedures alone have increased by 193% over the past decade. As complex specialties continue migrating to ambulatory settings, the demand for well-located outpatient facilities with the right infrastructure will only grow.
MOBs are also benefiting from extraordinary investor demand. Average occupancy across the sector reached 92.5% in 2025, with several markets surpassing 95%. With rents rising nearly 2% year over year, limited new supply, and a large amount of capital waiting to be deployed, the fundamentals look strong heading into the year. The primary constraint on investment isn’t demand; it’s a limited number of properties coming to market.
Technology is quietly becoming a differentiator as well. AI-assisted diagnostics, intelligent lighting, and climate control systems are improving both operational efficiency and the patient experience. Facilities built with advanced technology infrastructure are increasingly attractive to both tenants and investors, and assets that support AI-driven care delivery are beginning to command premium valuations.
Where This Leaves Us
Healthcare real estate isn’t immune to the macroeconomic pressures that have complicated capital markets over the last few years. But the structural case for MOBs remains as strong as it’s ever been. Aging demographics, the outpatient migration, sticky tenancy, and a chronic supply-demand imbalance are all pointing in the same direction.
For occupiers, the message is clear: quality space in well-located markets is hard to find and getting harder. Waiting for conditions to soften before making a move is a strategy that carries real risk. For investors and health systems thinking about their real estate strategy, the fundamentals favor disciplined capital deployment in high-quality outpatient assets, particularly in markets with strong population growth and provider density.
2026 looks like a year where the gap between informed market participants and everyone else gets wider. That’s always been true in healthcare real estate. It’s just more true now.
Frequently Asked Questions
Q1. Is now a good time to be looking for medical office space, or should we wait for the market to soften?
Waiting is a real risk right now. Vacancy in the top markets is sitting at 7.5% or below, and demand has outpaced new supply by nearly 4.7 million square feet since 2021 across the top 100 markets. That imbalance isn’t resolving itself anytime soon. New construction has been constrained by rising costs, so the pipeline of quality space coming online is limited. If you’re a physician group or health system that needs modern, well-located clinical space, the window to secure it on favorable terms is narrower than it was a few years ago. The practices and systems that act with a clear strategy tend to end up with better space at better economics than those who wait and hope conditions change.
Q2. We’re a smaller physician group. Does any of this market data apply to us, or is it mostly relevant to large health systems?
It absolutely applies to you. The same supply-demand imbalance that challenges large health systems affects independent and specialty groups just as much, sometimes more, because you have fewer resources to absorb a bad real estate decision. The good news is that the shift toward outpatient care and physician-aligned MOBs is creating real demand for well-run specialty practices in well-located space. Investors and health systems are actively seeking partnerships with physician groups that have strong patient volumes and clinical reputations. Understanding your real estate position, lease terms, renewal options, and location relative to your patient base is foundational to any growth or partnership strategy you’re considering.
Q3. What types of assets are drawing the most capital right now?
Capital is concentrating around on-campus and near-campus MOBs, outpatient surgery centers, and properties tied to high-acuity services. Class A assets with modern clinical buildouts, strong tenant rosters, and locations aligned with provider networks and patient populations are consistently outperforming. Investors are particularly focused on assets that can accommodate the continued migration of complex procedures to outpatient settings, since that trend has serious durability. Health systems and physician groups are also showing up on the buy side, representing nearly 10% of total transaction volume in 2025 through sale-leaseback and joint venture structures, which creates interesting partnership opportunities for capital partners.
