Chapter 8
Healthcare
U.S. Real Estate Market Outlook 2026
5 Minute Read
5 Minute Read
Trends to Watch
- Key megatrends are fueling demand for medical outpatient space:
An aging U.S. population, increased healthcare spending, more medical workers and new technologies are supporting greater Medical Outpatient Building (MOB) demand. - Cost pressures are driving healthcare providers to expand services in outpatient care settings with lower operating costs:
Falling government reimbursement rates and rising costs for materials and labor are pinching healthcare providers. Portfolio optimization and a pivot to outpatient care can streamline operations and lower operating costs. - MOB construction completions will fall to decade-low levels, reducing occupier options:
Asking rents remain elevated and some providers are being pushed into second-generation office space to meet their requirements. - Federal healthcare policy presents risk and opportunity:
The One Big Beautiful Bill Act includes more than $1 trillion in healthcare spending reductions. As a result, outpatient space demand will increase as providers seek more affordable healthcare delivery options and restrictions are eased on outpatient services. - AI will drive new efficiencies in healthcare real estate:
U.S. Census Bureau surveys show AI adoption by healthcare providers is accelerating. This technology offers significant potential to improve patient volume management and optimize existing space utilization.
Outlook
MOB construction completions are projected to drop by 26% in 2026 to the lowest level in over a decade, reducing occupier options. Deliveries of on-campus hospital facilities will contract even further. A more uncertain and less favorable U.S. healthcare policy, coupled with higher land and construction costs, has many hospitals, healthcare systems and providers less willing to make significant commitments or assume development risk.
The lack of quality outpatient space has reduced options for cost-sensitive healthcare providers who are facing new financial challenges stemming from rising costs for medical supplies and labor, as well as fewer Medicaid recipients. Given elevated construction costs, developers will remain cautious about pursuing speculative development in 2026.
Figure 11: 2026 Rent & Vacancy Forecast for Medical Outpatient Buildings
The average MOB rent is projected to climb to a record high in 2026 as rent growth accelerates to 1.4% from 0.9% in 2025.
The scarcity of available supply will support tight vacancy and continued rent growth for MOBs this year. MOB vacancy will stabilize within its typical range of 9.5% to 10.5% over the past 10 years. The average MOB rent is projected to climb to a record high in 2026 as rent growth accelerates to 1.4% from 0.9% in 2025. An ongoing industry pivot toward outpatient care and low vacancies will drive rent growth in select markets, mostly in the South and West.
Healthcare occupiers are increasingly focusing on real estate for savings and efficiencies, as industry cost pressures persist and new federal healthcare policies take effect. Occupiers will continue to pursue lower-cost options for healthcare delivery (i.e., MOBs), including conversions of obsolete office and retail buildings. The range of options reflects the flexible approach that healthcare providers, particularly large systems, will need to take to ensure that their portfolios are efficient and cost effective. Financially sound healthcare systems will continue to lease build-to-suit MOBs with long lease terms.
Contact
Healthcare
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