Medical Outpatient Building Perspective

Essential care means steady occupancy and growing interest for investment in the sector

April 11, 2024
  • Kari Beets

Medical outpatient buildings have seen relentless demand and remain one of the most resilient commercial real estate property types. Both health systems and providers as well as investors view the sector as a critical alternative asset class. This year’s Medical Outpatient Building Perspective looks at five key themes impacting providers and medical office owners and operators:

  1. Setting the stage: What’s driving demand? Demographic trends, technology and reimbursement changes continue the shift toward outpatient care, driving demand for outpatient medical buildings.

  2. Fundamentals: Occupancy climbs due to steady demand and limited construction. With the shift, demand for outpatient medical space is steady, but rising financing costs have limited construction, pushing overall occupancy and rents upward.

  3. Construction costs creating challenges for occupiers and owners. Health systems and providers face thin margins while landlords also face rising costs for maintenance and renovation.

  4. Population and employment driving market growth. Sun Belt markets are seeing high rates of population growth, which in turn will drive increased outpatient volumes in those regions.

  5. Capital markets: Slow transactions but opportunity ahead. Transaction volumes for outpatient medical dropped in 2023 due to financing challenges but will pick up once interest rates stabilize, as the sector is in favor with investors seeking stability.

Discover how medical outpatient building real estate can be a lever to increase patient access and market share and reduce costs by downloading the report. You can also dive deeper into the data by viewing JLL Healthcare’s U.S. Medical Outpatient Building Dashboard included in the report.

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