Colliers Q2 2026 Report: Inside the Hospital Portfolio Optimization Trend
Hospital Systems Are Splitting Into Two Asset Classes. Most Real Estate Strategies Still Treat Them As One.
Colliers’ Q2 2026 healthcare services report puts a number on something occupiers in this sector have felt for several years: hospital systems are no longer managing a single real estate portfolio. They’re managing two, with opposite trajectories. The acute care footprint is shrinking and consolidating into fewer, higher-acuity centers of excellence. The ambulatory footprint is expanding into retail corridors, mixed-use developments, and employer sites at a pace that’s outrunning most systems’ internal real estate teams.
That split is the report’s real finding, even though it’s framed more diplomatically as “portfolio optimization.” If you represent a health system, a physician group, or an investor in this space, the practical question isn’t whether this shift is happening. It’s whether your real estate strategy is built for two asset classes moving in opposite directions, or still built for one.
Hospital systems are beginning to fundamentally transform how they deliver care, deploy capital, and successfully compete in an increasingly consumer-driven market. They are moving beyond traditional, facility-centric models to more deliberate, portfolio-based strategies that integrate real estate planning, network optimization, and destination-based care delivery. These changes reflect the growing recognition that health systems must align physical assets and service offerings with evolving patient expectations, market demands, and financial realities.
The growing use of advanced analytics and artificial intelligence (AI) to inform strategic decisions is a critical component of this transformation. These capabilities can optimize network design, guide site selection, prioritize service lines, and improve patient engagement. This data allows organizations to improve operational efficiency, forecast demand more precisely, and enable more personalized and accessible care. Systems can build greater agility as they adapt to ongoing shifts in usage patterns and consumer behavior.
At the same time, health systems are redefining real estate’s role within a broader, experience-focused ecosystem of care. There is a clear movement to both right-size acute care assets and expand outpatient, virtual, and convenience-oriented access points. Investment in flagship campuses and community-integrated sites can deliver a seamless, end-to-end care experience. This report explores how health systems are advancing these efforts — reconfiguring portfolios, optimizing real estate strategies, and positioning their networks to meet the demands of a more consumer-centric healthcare landscape.
What Is Portfolio Optimization?
Real estate portfolio optimization is the strategic process of selecting, managing, and allocating assets to maximize overall performance. This is typically measured by returns, risk-adjusted returns, cash flow stability, and long-term value, while aligning with the institution’s objectives and constraints.
In today’s environment — marked by rising operating costs, reimbursement pressures, workforce shortages, shifting care delivery models, and growing demand for access — optimizing the real estate portfolio has become vital for health systems. Organizations often maintain extensive and diverse real estate footprints, including hospitals, outpatient clinics, ambulatory centers, and administrative facilities, many of them underused or misaligned with evolving care strategies. Portfolio optimization enables decision-makers to strategically assess and rationalize these assets. It ensures that capital is deployed efficiently and that facilities are located, sized, and configured to support patient demand, population health needs, and growth objectives.
By improving space utilization, eliminating unnecessary or aging infrastructure, and prioritizing investments in high-performing or strategically critical locations, health systems can lower operating costs, free up capital for clinical investments, and improve care delivery. Portfolio optimization enhances both flexibility and resilience, enabling organizations to adapt more effectively to competitive market dynamics and changes, such as shifts toward outpatient care and the expansion of telehealth.
Portfolio Evaluation and Optimization in Hospital Systems
Health systems throughout the United States are fundamentally revising how they view and manage their real estate and care delivery assets. What was once a largely operational exercise — focused on facility maintenance and compliance — is rapidly evolving into a sophisticated investment portfolio strategy. Decision-makers, physicians, and real estate investors alike are now expected to evaluate assets based on performance, return on investment, and long-term market positioning. This reflects broader industry pressures, including margin compression, workforce challenges, and growing competition from non-traditional care providers such as retailers and alternative medicine providers. As a result, organizations are intentionally reallocating capital from low-utilization inpatient settings to high-demand outpatient and ambulatory services that better align with patient preferences and payer incentives.
Asset rationalization is the core of this transformation. Health systems are rigorously evaluating each facility and service line against clinical performance, financial contribution, and market relevance. Clinical quality and specialty strength help determine whether a facility ranks as a center of excellence, while financial metrics such as margin and EBITDA (earnings before interest, taxes, depreciation, and amortization) clarify its sustainability. Understanding how each asset fits within the broader market, including demographic trends, payer mix, and projected population growth, is equally important. These analyses drive decisions like expanding highperforming assets, transitioning underused facilities to outpatient, post-acute, or behavioral health settings, and divesting or closing locations that no longer support strategic objectives. For investors, this creates opportunities to reposition assets in line with evolving care-delivery models.
Network optimization further strengthens portfolio performance by aligning care delivery with patient demand and cost efficiency. Advanced analytics and data-driven demand modeling determine where and how care should be delivered. By incorporating population health trends, migration patterns, and employer and geographic data, leading health systems can ensure that patients access clinically appropriate care in the lowest-cost setting. This approach is often implemented through a hub-and-spoke model: central hubs, typically hospitals or major medical centers, focus on complex, high-acuity services, while spokes — such as ambulatory surgery centers (ASCs), urgent care clinics, and specialty practices — extend access into communities. This network design improves patient convenience while enhancing system-wide efficiency and capacity utilization.
Integrating the service-line strategy is a critical component of portfolio optimization. Health systems are increasingly aligning capital spending and facility planning with high-growth specialties that drive clinical excellence and brand differentiation. The strong demand profiles and revenue potential of orthopedics, oncology, cardiology, and women’s and pediatric services have led health systems in many markets to establish dedicated campuses or service-line-focused facilities that consolidate expertise, technology, and patient experience in a single location. These investments enable providers to compete more effectively, attract top clinical talent, and deliver more coordinated, high-quality care.
Finally, digital infrastructure and technology are pivotal to modern portfolio strategies. The integration of AI and advanced analytics, including machine learning algorithms, is helping health systems improve the efficiency of portfolio analysis and expedite the process, thereby enabling more detailed reviews. At the same time, enhanced connectivity among facilities, providers, and patients is creating a more seamless, integrated care experience. Telehealth, remote monitoring, and digital front-door solutions extend the reach of health systems beyond traditional physical assets and further reshape how portfolios are defined and managed. All these capabilities can maximize asset values and deliver more accessible, efficient, and patient-centered care.
Evolution of Healthcare Real Estate Strategy
Healthcare real estate strategy is undergoing a profound transformation. For investors, health systems, and providers, the traditional large, centralized hospital campus is being replaced by a more distributed, consumer-oriented footprint. This evolution reflects the broader industry shift toward value-based care, operational efficiency, and greater accessibility. Real estate is not a static asset but a dynamic component of strategic growth, market positioning, and patient engagement.
The growth of outpatient and ambulatory care is one of the most significant changes shaping healthcare real estate. Advances in medical technology, payer reimbursement pressures, and patient preference for convenience have accelerated the migration of services out of inpatient settings. Health systems are increasingly investing in freestanding facilities, including ASCs, imaging centers, urgent care clinics, and freestanding emergency departments. These assets are strategically located in high-visibility, high-access areas, such as retail corridors, suburban growth markets, and mixed-use developments, allowing providers to lower operating costs, improve throughput, and expand market reach closer to where patients live and work.
Advisory Board outlines a “portfolio approach to ambulatory investment” (below) that categorizes healthcare services into three strategic groups with distinct, yet complementary, roles in organizational performance. Drivers, such as specialty surgery, imaging, and interventional services, primarily generate revenue while enabling capacity leverage and predictable, scalable financial returns. Consult-heavy specialties, primary care, and urgent care focus on creating demand, retaining patients, and protecting market share by shaping referral patterns and improving front-door access. System stabilizers, such as behavioral health, chronic care management, and specialty coordination clinics, aim to reduce costs and variability by avoiding unnecessary use and supporting value-based care models.
Collectively, these service types help health systems balance revenue generation, patient access, and cost control while aligning with broader organizational goals, such as reducing emergency department use, influencing patient choice, and enabling risk-based care strategies.
Closely tied to this shift is the “retailization” of healthcare, which positions care delivery as integral to consumers’ everyday lives. Retailization underscores the importance of visibility, accessibility, and convenience to attracting and retaining patients. Increasingly, healthcare providers are co-locating services alongside grocery stores, fitness centers, pharmacies, residential developments, and lifestyle retail destinations. These environments offer ample parking and easy access, generating natural patient flow. In many cases, cotenants provide valuable insights into community demographics and consumer behavior, helping health systems better align services with local demand and identify emerging healthcare needs.
The adoption of flexible, modular facility design represents another critical aspect of the evolution in healthcare real estate. With the rapid changes in clinical practices and technology, health systems are prioritizing adaptability throughout their physical assets. Modern facilities feature modular layouts that accommodate evolving service lines, new equipment, and future technology integration. Modular design can, for example, create clinical spaces that can shift between specialties or telehealth-enabled exam rooms that support hybrid care models. This flexibility reduces long-term capital risk, extends asset life, and enables providers to respond quickly to changing market conditions and patient needs.
Strategic real estate partnerships are increasingly important for enabling growth and managing capital constraints. Health systems are forming joint ventures with real estate investment trusts (REITs), private developers, and institutional capital partners to fund, develop, and operate healthcare facilities. These partnerships allow providers to reduce upfront capital expenditures, accelerate time-tomarket, and share development risk. For investors, they offer access to stable, healthcare-oriented assets with long-term tenancy and strong demand fundamentals. As financial pressures persist, these collaborative models are becoming essential tools for executing largescale portfolio strategies.
The evolution of healthcare real estate strategy reflects a broader shift toward decentralization, consumerism, and controlling costs. For investors, this presents a compelling opportunity to participate in a resilient, rapidly transforming sector.
Healthcare as a Destination Experience
Healthcare facilities are moving from purely clinical environments to more welcoming spaces that promote comfort, engagement, and long-term wellness. This shift reflects evolving patient expectations, competitive market dynamics, and a broader understanding of health as a continuous journey rather than a series of episodic interventions. In response, healthcare organizations are reimagining how physical space, services, and brand identity converge to create meaningful, consumer-centered capabilities.
At the core of this transformation is experience-centric design. Increasingly inspired by the hospitality sector, hospitals and clinics increasingly seek to offer environments that reduce stress and promote healing. These settings feature abundant natural light, materials such as wood and stone, and curated art installations to relax patients. Intuitive wayfinding systems — both physical and digital — help patients and visitors navigate complex facilities. Complementing these design elements are premium amenities. Concierge services, comfortable and thoughtfully designed waiting areas, and digital check-in systems streamline administrative processes and create a more personalized patient journey.
Beyond the physical environment, healthcare providers are broadening their role through integrated wellness ecosystems. Rather than focusing solely on acute care, organizations are expanding services to support longterm health and well-being, such as fitness and rehabilitation centers, nutrition counseling, preventive care programs, and behavioral health services. Recovery-focused amenities, such as physical therapy suites and wellness programs, further strengthen a comprehensive care model; they mark a strategic shift away from “sick care” toward lifelong wellness engagement and position healthcare systems as partners in maintaining health.
Another key dimension of this transformation is the rise of mixeduse campuses. Healthcare facilities are increasingly integrated with complementary uses, including retail, residential housing, office space, and hospitality venues such as hotels. Lively, multifunctional destinations draw a broader, more consistent flow of visitors. Integrating healthcare into everyday community environments increases accessibility and convenience and strengthens the organization’s presence in the community. From a business perspective, mixed-use campuses generate diversified revenue streams and enhance financial resilience by reducing dependence on clinical services alone.
Digital and physical integration is also reshaping how patients interact with healthcare spaces. Omnichannel care delivery can move patients seamlessly between virtual and in-person interactions. Online scheduling, telehealth consultations, and coordinated care pathways ensure that patients receive therapeutic services in the most convenient and appropriate setting. Within physical facilities, smart technologies enhance the patient experience with navigation apps, real-time wait tracking, and personalized guidance. These innovations bring healthcare experiences closer to the standards set by the retail and travel industries, where convenience, transparency, and responsiveness are paramount.
Developing a strong brand identity is central to establishing healthcare facilities as true destinations. Leading organizations are building specialized centers of excellence in orthopedics, oncology, women’s health, and pediatrics. These destination brands are defined by distinctive architecture, signature programs, and the integration of research and clinical care. Iconic buildings and thoughtfully designed campuses signal a commitment to innovation and excellence. As recognizable, trusted brands, healthcare providers can attract patients from broader geographic areas and nurture long-term loyalty.
Transforming facilities into destination experiences represents a comprehensive rethinking of how care is delivered and perceived, and positions healthcare not only as a service but as an essential, integrated part of everyday life.
Core Strategic Drivers
Healthcare organizations increasingly recognize that portfolio optimization and a stronger real estate strategy are critical enablers of clinical excellence and patient-centered care delivery. As the industry evolves, physical assets are not merely necessities: they’re strategic tools that shape how care is accessed, experienced, and valued.
The rise of healthcare consumerism is one of the most powerful forces driving this change. Today’s patients approach healthcare decisions with the same expectations they bring to retail, hospitality, and other service industries. They demand convenience, transparent pricing and service, and consistently high-quality experiences across touchpoints. This requires organizations to rethink where and how care is delivered. Portfolio optimization plays a key role by enabling providers to locate facilities closer to where patients live and work, reduce barriers to access, and create welcoming rather than institutional environments.
The transition to value-based care is accelerating change, fundamentally reshaping how services are reimbursed and delivered. Under value-based models, providers are incentivized to prioritize prevention, early intervention, and efficient care delivery in lower-cost settings. This drives the shift of care from traditional inpatient hospitals to outpatient facilities, community-based clinics, and homebased care. Real estate strategies must therefore adapt to decentralization. By optimizing portfolios to include a broader mix of care settings — such as wellness centers, diagnostic hubs, and rehabilitation facilities — organizations can better manage population health, while reducing costs. This improves both financial performance and patient outcomes.
Competitive pressure further accelerates the need for strategic real estate transformation. Non-traditional entrants, including retail drugstores and grocery clinics, as well as technology-enabled, virtual-first providers, are reshaping the healthcare landscape. These competitors often excel in convenience, speed, and user experience, raising the bar for traditional systems. Established providers must differentiate themselves through superior access and patient experience. A well-optimized real estate portfolio enables this by prioritizing high-visibility locations, integrating digital and physical care pathways, and designing intuitive, patient-friendly spaces. Facilities become extensions of a broader brand promise centered on ease, trust, and quality.
Capital constraints underscore the importance of disciplined, strategic real estate management. Healthcare organizations face mounting pressure to maximize return on investment while controlling costs in an uncertain financial environment. This necessitates a more rigorous approach to evaluating facility performance, reducing underused space, and investing in assets that deliver the greatest clinical and financial value. Portfolio optimization enables systems to streamline their footprint, reduce fixed costs, and reallocate resources to high-growth or high-demand areas. In many cases, this calls for leveraging partnerships — such as joint ventures with developers, retailers, or other healthcare entities — to share risk and accelerate access to new markets without excessive spending.
The convergence of consumerism, valuebased care, competitive disruption, and financial constraints is prompting healthcare organizations to rethink real estate strategies as a core component of patient-centered care. By optimizing their portfolios and aligning physical assets with evolving care models, providers can create more accessible, efficient, and responsive therapeutic environments, enhancing the patient experience and positioning themselves for long-term sustainability.
Characteristics of Best-In-Class Health Systems
1. Rationalized acute care footprint
Best-in-class health systems distinguish themselves through a deliberate and disciplined approach to their acute care footprint. Rather than maintaining an expansive network of large, resourceintensive hospitals, they rationalize their inpatient capacity to align with actual demand and evolving care models. This often means consolidating services, reducing redundant facilities, and concentrating highacuity care in strategically located centers of excellence. This can improve operational efficiency, enhance clinical quality through higher volumes and specialization, and free up capital for investment in more accessible, patient-friendly care settings.
2. Expanded outpatient and convenience-focused networks
Leading health systems are aggressively expanding their outpatient and conveniencefocused networks beyond traditional hospital walls, developing a broad range of ambulatory sites, urgent care centers, and neighborhood clinics that bring services closer to where patients live and work. These networks are designed for accessibility and ease, offering extended hours, simplified scheduling, and streamlined experiences. This shift aligns with patient expectations for convenience and supports lower-cost care delivery and improved population health outcomes.
3. Development of flagship destination campuses
Flagship destination campuses serve as highly visible anchors for the organization’s brand and capabilities, often integrating advanced clinical services with research, education, and specialized programs. Their distinctive architecture and thoughtfully designed environments attract local and regional patients seeking high-quality, specialized care. These destinations aim to reinforce trust and reputation while providing a comprehensive, coordinated care experience in a single location.
4. Integration into daily life ecosystems
Leading organizations strategically co-locate services in retail, residential, and workplace settings, making healthcare a part of everyday routines. Whether through clinics in mixeduse developments, employer partnerships, or collaborations with community organizations, these systems reach beyond traditional healthcare boundaries. Such integration fosters stronger community connections, increases engagement, and makes preventive and ongoing care more accessible.
5. Delivery of retail/hospitality-level patient experiences
Best-in-class health systems excel at delivering patient experiences that are comparable to those in the retail and hospitality sectors. From intuitive navigation and digital engagement tools to comfortable, well-designed physical spaces, every aspect of the patient journey is considered. By focusing on the total experience — not just clinical outcomes — these organizations build lasting patient relationships and differentiate themselves in an increasingly competitive market.
Healthcare systems are moving away from reactive care facilities, focusing on strategies that support proactive, integrated health regimens embedded in everyday life. Portfolio optimization ensures that the right assets are in the right location and aligned with demand, performance, and strategic priorities. Modern real estate strategies help these assets attract, engage, and retain patients by delivering convenient, consumeroriented, experience-driven environments. Together, these shifts are redefining healthcare delivery — transforming it into a destination-oriented, integrated service that meets patients where they are and fits naturally into their daily lives.
Frequently Asked Questions
What is healthcare portfolio optimization? It’s the practice of evaluating every facility a health system owns or leases against clinical performance, financial contribution (margin and EBITDA), and market relevance, then deciding to expand, convert, or divest each asset rather than maintaining the footprint as-is.
What is the hub-and-spoke model in healthcare real estate? Hospitals and major medical centers act as hubs handling complex, high-acuity care. ASCs, urgent care clinics, and specialty practices act as spokes, extending access into communities for lower-acuity, higher-convenience services.
Why are health systems using sale-leaseback transactions? To free up capital tied to existing real estate and redirect it toward clinical investment, outpatient expansion, or flagship destination campuses, without taking on additional debt.
Are health systems building fewer hospitals? They’re consolidating inpatient capacity into fewer, higher-acuity centers of excellence while simultaneously expanding the number of outpatient and ambulatory sites, so total facility count isn’t necessarily falling, but the mix is shifting sharply toward ambulatory.
