News release

Transaction volume expected to pick up in 2023 due to strong medical office fundamentals

JLL Valuation Advisory’s group releases its first ever healthcare survey detailing trends in healthcare capital markets and the investor outlook for 2023

February 21, 2023

Kristen Murphy

Capital Markets, Hotels & Hospitality and Value & Risk Advisory PR
+1 617 848 1572

CHICAGO, Feb. 21, 2023 – JLL’s Valuation Advisory group has released its inaugural Healthcare Investor Survey and Trends Outlook, which surveyed nearly 130 influential leaders in the healthcare sector for insight on key themes in healthcare capital markets and the investor outlook for 2023.

Healthcare transaction volume hit a record-high in 2022 with approximately $26 billion invested into the sector. Investors continued to be drawn to medical office buildings, which comprised the largest portion of investment in 2022 at 58%, and, of the investors surveyed, 66% indicated medical office buildings would remain the biggest investment opportunity in 2023. However, with the shift to more and more outpatient care, ambulatory surgical centers (ACSs) comprised a larger portion of sales, representing 27% in 2022 compared to approximately 20% in 2021. Not surprisingly, ACSs were also noted as the second largest investment opportunity for the coming year.

“Healthcare has been a resilient industry that is still very much non-investor owned, presenting plenty of opportunity for providers or healthcare systems to monetize their real estate holdings in the years to come,” said Erik Hill, MAI, CCIM, MRICS, National Head of Healthcare and Life Sciences for JLL’s Valuation Advisory group. “As investors look to alternative sectors, healthcare presents tremendous opportunity particularly in the growing ACSs, rehabilitation and behavioral health segments of the space.”

Medical office transaction volume and pricing is expected to stabilize in 2023 after uncertainty in H2 2022 and H1 2023 due to rising interest rates. The underlying fundamentals remain strong with resilient occupancy standing at 92.3% at year-end 2022 and steady rent and NOI growth. Nearly 90% of office visits are still occurring in-person with telehealth declining to 10% of all visits after a high of 54% during the pandemic. In addition, due to the high costs to build out medical office space, medical office tenants tend to remain in place longer, providing stable occupancy. Medical office asking rent has been increasing 2.29% on average for the last two years and is projected to grow as deliveries into the sector slow.

Of the investors surveyed, 66% indicated medical office buildings are the biggest opportunity within the healthcare space in 2023, followed by ASCs. Most respondents also indicated that they expect market valuations and transaction activity to improve in the next 12 months given the tailwinds of demographic shifts and the inelasticity of medical services.

JLL Valuation Advisory is the essential guide to the changing face of real estate values and risk. The team brings together unrivalled human intelligence and experience, with continuous, data-driven insights to uncover a panoramic view of value and risk across sectors and geographies. 

JLL’s 2,000 qualified valuation professionals are connected across more than 50 countries, sharing insights and real-time data to advise on changing market dynamics and trends before they happen. A global community of sector-based specialists, the team delivers tailored client solutions for your real estate and business asset interests, giving an accurate picture of value and risk across any opportunity.

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U.S. property valuation and tax consulting services are performed by JLL Valuation & Advisory Services, LLC, a wholly owned indirect subsidiary of Jones Lang LaSalle Incorporated.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of September 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit