2026 Medical Outpatient Building Perspective

A rapidly aging population, expanding outpatient service lines and constrained new development are reshaping the MOB landscape. Occupancy is at a record high (92.7%) and average rent growth continues to outpace office, and institutional investment is increasing, but policy changes and financial pressures are heightening risk for both occupiers and investors.

An aging population and corresponding disease prevalence is sustaining outpatient volume growth. Out of the top 10 growth areas for patient volumes, 8 are in outpatient services. Hospital systems are shifting care to outpatient settings and expanding with more outpatient locations, which have lower costs than inpatient care.

Policy changes are putting additional pressure on hospital system margins as the burden of uncompensated care for uninsured patients rises. To respond, healthcare providers are prioritizing on reducing operating costs, improving efficiency and optimizing their portfolio with outpatient expansion at the forefront.

New MOB starts fell in 2023 as higher financing costs limited new construction. MOB starts hit a trough in Q4 2024 at only 1% of inventory but have picked up slightly in H2 2025 to 1.1% of inventory. Speculative development is still limited, and hospital and health systems lead construction starts, occupying a large portion of their new projects leaving limited available inventory. Outpatient buildings are increasingly complex, incorporating imaging, surgery centers, labs and physician offices in the same facility.

Absorption has consistently outpaced deliveries, which creates pricing power for landlords, particularly with tenants in high-margin specialties. Lease structures are trending toward more aggressive escalations. Average MOB growth has consistently outperformed office and Class A average rent since 2022, and new construction rents are running at nearly twice in-place rents.

Tenants backed by health system credit lead medical leasing. Health systems accounted for 46% of medical leasing tracked in 2025 with expansion focused on large multispecialty clinics in the 40,000–60,000 square foot range. Specialty providers had the second largest share at 36%, of which 28% was in psychiatry and behavioral health.

To expand their footprint and outpatient service lines, hospital systems are using mergers with other health systems, acquiring practice groups and employing physicians. Consolidation by healthcare providers has progressed at a steady pace over the last decade. Private equity roll-ups are also creating consolidation in the industry – healthcare is fragmented and investors can make practices more efficient through consolidating back-office functions and growing brand recognition.

Well performing fundamentals including high occupancy, and steady rent growth continue to draw investor interest towards the MOB sector. Transaction volume accelerated in Q4 2025 led by Welltower’s $7.2 billion portfolio disposition to Remedy Medical Properties and Kayne Anderson, but aside from this entity-level transaction M&A was more limited than in 2024 even as single-asset and small portfolio sales remained consistent with 2024 levels.

Institutional groups’ share of MOB purchases in 2025 was larger than any other year this decade. Dry powder is near all-time highs, but funding transactions is difficult for assets that do not fall neatly into core plus / value-add / or opportunistic buckets which makes pricing challenging.

Improving operating fundamentals, a highly liquid capital markets environment, and increasingly active debt markets are likely to make for stronger transactions volume in 2026. However, policy changes and declines in coverage could significantly affect specific assets and service lines.

For Occupiers

• For health systems and provider groups, demographic-driven portfolio strategy is essential for revenue growth and stable margins.
• At renewal, tenants need to prepare for significant rent resets as there is a widening gap between in-place and market rents.

For Investors

• With limited supply and rising occupancy, MOB assets provide a mark-to-market opportunity for investors and a window to strengthen rent rolls through renewals for sellers.
• Consolidation means that fewer decision makers will control larger portfolios of outpatient sites, meaning location decisions will be more sophisticated.
• Policy changes and coverage declines may affect the payor mix and revenue, so asset-level due diligence is key.