Healthcare’s outpatient revolution: Double-digit growth on the horizon

CHICAGO, March 4, 2025 – An aging population, surge in outpatient demand and the ever-present need for services near growing populations are all contributing to strong demand in the healthcare sector. According to Advisory Board, outpatient volumes in the U.S. are expected to grow 10.6% over the next five years. JLL’s new 2025 Medical Outpatient Building (MOB) Perspective reveals the key trends shaping the healthcare real estate landscape, including the accelerating move toward outpatient care, rising occupancy, limited construction for purpose-built MOBs, steady rent growth, demographics driving expansion in Sunbelt markets and medical buildings offering continued stability for investors and health systems.

“These findings reflect the ongoing transformation of the healthcare real estate landscape, driven by factors such as changing patient preferences, technological advancements and demographic shifts,” Cheryl Carron, COO, Work Dynamics Americas, and President, Healthcare Division, JLL. “Health systems are taking a more active role in shaping their real estate portfolios and, along with corporate medical groups, are at the forefront of change, implementing ambitious ambulatory care strategies to improve patient outcomes and optimize their revenue streams.”

An aging population and increasing disease prevalence continues to drive the overall need for care. The site of care shift from inpatient to outpatient will continue as technology and patient preference is driving advances in medical care, making treatments less expensive, safer and less invasive.

Health systems are leaning into this and are expanding their real estate footprint and either acquiring or contracting with physician groups to add specialties. From 2022 to 2023, 16,000 additional physicians became employees of a hospital system, and health systems accounted for 46% of MOB leases that JLL tracked in 2024. Specialty providers comprised 31% of the MOB leases, with psychiatrists and behavioral health providers making up the largest group of these, accounting for 18% of this square footage.

“We’re seeing a clear trend of hospitals and health systems focusing on high-value services such as orthopedic and cardiovascular care,” said Matt Coursen, Executive Managing Director, Market Leader, Mid-Atlantic Healthcare Group, JLL. “These healthcare providers prioritize access, convenience and visibility for their outpatient locations, in some cases mirroring retail tactics to capture market share either via acquisition or de novo growth. Their site selection process is intricate, involving analysis of patient data, community demographics, care gaps, population growth, insurance coverage, referral networks and competitor proximity. Hence, why it is more important than ever to have a data-driven ambulatory network strategy that aligns with the real estate portfolio.”

While Sunbelt markets are seeing significant growth due to population shifts, the report details strong performance in markets like Boston and Northern New Jersey that benefit from the presence of established, growing health systems with strong brand recognition, which can support growth through fundraising and attract high-value specialties.

Markets with strong rents and occupancy are spread throughout the country, with four Sunbelt markets seeing rent growth over 3% – Miami, Orlando, Austin and Tampa. New York led all markets with new outpatient services move-ins in 2024 for both leased and owned space. Although Philadelphia led all markets in 2024 MOB net absorption, with Houston and Atlanta posting more than 400,000 square feet of net absorption each, the Norfolk/Hampton Roads, Virginia, area saw strong absorption compared to total inventory.

Medical buildings continue to offer stability for investors, and health systems also see benefits to ownership. Medical outpatient transaction volume increased in 2024, bolstered by significant acquisitions in the sector.

The report also provides insights on the future perspective of the MOB market, including potential challenges and opportunities for developers, health systems, tenants and investors. Key considerations include the impact of changing healthcare delivery models, challenges posted by limited supply pipeline and the role of technology in shaping future healthcare real estate needs.

“The stability and growth potential of medical outpatient buildings continue to attract investors,” said John Chun, Senior Managing Director and Medical Properties Group Leader, Capital Markets, JLL. “With average lease escalations of 3% and terms for new leases averaging almost nine years, MOBs offer a compelling investment opportunity in today’s market.”

Healthcare demand remains robust due to an aging population and increased outpatient needs; however, potential challenges may impact demand for medical outpatient spaces and shake up the healthcare sector.

“Looking ahead, we anticipate continued evolution in the healthcare real estate sector,” added Carron. “Factors such as the shift to home-based care, telehealth advancements, changing healthcare policies and demographics will all play a crucial role in shaping the design and demand for medical outpatient space. Stakeholders across the industry will need to remain agile and forward-thinking to capitalize on these emerging trends.”

JLL Healthcare provides a full range of real estate and facilities solutions for hospitals, physicians and other care providers as well as real estate investors that own and operate medical and seniors housing properties. The company helps its healthcare clients plan, find, finance, buy, lease, sell, construct, optimize, manage and maintain the most-advantageous facilities anywhere in the U.S. for all property types along the continuum of care, serving over 550 million square feet of healthcare property annually. Its professionals have deep technical expertise and market knowledge and are armed with the most innovative, data-driven analytics and business intelligence in the industry. Visit us.jll.com/healthcare to learn more.

For more news, videos and research resources on JLL, please visit JLL’s newsroom.