As we step into 2025, the healthcare real estate sector is poised for significant growth and transformation. Experts predict that the industry will not only stabilize but continue to expand, driven by evolving demand and emerging trends. According to Commercial Property Executive , this year holds exciting opportunities for both investors and providers as healthcare facilities adapt to new challenges and opportunities. As their article notes, “Economic challenges are expected to ease in the upcoming year, particularly in new geographical areas to better serve patients that live farther away from traditional city centers and hospital locations.” This expansion is occurring in many regions across the country, such as projects in the works like the Oakland County Hospital building its new $48 million emergency department or the Round Rock hospital in Austin, Texas undergoing a $220 million expansion . Overall, as Shawn Janus, National Director, Healthcare Services and Marianne Skorupski, Director, National Office Research at Colliers share, “The easing of inflation has brightened the outlook for healthcare real estate investment.” Experts in the field outline the top three components that distinguish what’s to come – read below to learn more.
1. Geographical Expansion and Facility Upgrades
As mentioned, the projects undergoing renovations and expansions seem to increase as the year begins. Healthcare Facilities Today reported that Baylor St. Luke’s Medical Center, part of CommonSpirit Health, is launching three transformative projects to expand patient capacity and improve care quality. This comes as no surprise, as the Commercial Property Executive’s article affirmed that health care remains a leading sector for job growth in the country, thereby increasing both the number of patients and the availability of nursing and related jobs. In fact, they found that “overall employment in this field [is] projected to grow much faster than the average for all occupations from 2023 to 2033, according to the Bureau of Labor Statistics.”
Expanding physical space is a key component expected for hospitals. For example, according to Healthcare Finance , “inpatient (IP) and outpatient (OP) volumes will continue to increase over the next decade, impacting how and where organizations deliver care, according to the 2024 Impact of Change analysis from Sg2, a Vizient company.” As healthcare facilities continue to expand and evolve, the geographic location of these facilities plays an increasingly vital role in their success. According to CBRE’s 2025 U.S. Healthcare Real Estate Outlook , they project that Boston, Houston, and Dallas will lead the way in Medical Office Building (MOB) absorption. While Houston has held the top spot in MOB absorption since 2020, the report indicates that Boston is poised to surpass it in the coming year. Regardless of the shifting dynamics, the location of healthcare facilities remains a critical factor. As Colliers’ Janus and Skorupski highlight, “Primary care practices and urgent care operators are increasingly targeting spaces near residential areas, often converting vacant retail properties into healthcare facilities.” As a result, proximity to local populations is key in healthcare facility decisions.
2. Increasing Demand for Outpatient Facilities
In addition to physical expansions, another key development in healthcare real estate is the increasing demand for outpatient facilities. According to Commercial Property Executive’s article, “Why the Medical Outpatient Sector is Poised for Growth in 2025 ,” outpatient facilities are highly sought-after and are driving the largest demand. CBRE’s report found that medical outpatient buildings (MOBs) are well-positioned as more procedures likely will shift from ambulatory surgical centers and hospitals to medical outpatient facilities. This shift is primarily driven by the considerably lower cost of performing these procedures in outpatient settings, which is attracting more patients away from hospitals. For instance, CBRE claims that “the considerably lower cost to perform these procedures in outpatient settings is driving more patients away from hospitals.”
Lower costs are not the only benefit, as understandably, location plays a key role to patients’ decision-making when choosing facilities. For instance, the U.S. Healthcare Real Estate Outlook report found that there is a rising trend of bringing healthcare services closer to residential populations. “MOB developments adjacent to or directly on hospital campuses are 150% larger than off-campus properties,” their report said. As we look ahead, developments like the City of Powell and Ohio State’s $183 million project or the Beacon Health System’s $21.7 million outpatient center are just a couple of the construction projects in the works for 2025.
3. Technological Advancements and Their Impact
Technology continues to play a central role in advancing the medical industry. For instance, according to Commercial Property Executive , Cristi Swayze, Marketing Associate with Big Sky Medical stated, “While technological advancements in health-care delivery were initially thought to decrease the demand for MOBs, trends shows otherwise,” Swayze said. “Telehealth visits are not preferred by many elderly patients due to a lack of understanding of the technology or a preference for in-person consultations. This trend is creating a demand for flexible outpatient spaces where technology can be integrated, enhancing the physical visit.”
This example illustrates how artificial intelligence (AI) can play a significant role in the growth of the MOB sector. However, as Colliers’ experts Janus and Skorupski point out, there are challenges associated with technological advancements. They emphasize that while incorporating new technologies requires additional power and infrastructure, it is equally important to balance these innovations with the needs of a patient population that may be hesitant about their integration. This includes older patients, as Swayze mentioned, as well as those less familiar with technology who may need more time to adapt to new tools and systems.
As CBRE’s report highlights, “AI enables healthcare practitioners to focus on priorities like patient engagement, ultimately improving health outcomes.” AI is designed to assist, not replace, as many might fear. As Mark Chrisman, PE, PhD, Health Sector Executive, Henderson Engineers emphasizes the need to look ahead, he advises facilities to “work through a master plan for current and future needs as well, as flexibility for other new or emerging technologies can be impactful for space, resource and financial planning.”
These trends and more will be discussed by leading experts at this year’s BOMA Medical Real Estate Conference, May 7-9, 2025 in Denver, CO. Learn more at www.BOMAmedicalconference.org .
Interested in more content like this? Read our recent articles, 2025 Trends: Communication and Care in Medical Office Spaces or World’s Best Smart Hospital Shares Its Success .