Top Markets for Medical Office Investments in 2025

By 2030, all baby boomers will be over 65, contributing to a 73% increase in demand for outpatient services compared to just a decade ago. This highlights that the United States healthcare system faces huge demand as millions of aging adults require consistent and accessible medical care. 

At the same time, hospitals are shifting nonurgent procedures to specialized outpatient settings to reduce strain and costs. This transformation has accelerated investor interest in medical office buildings (MOBs) and senior healthcare facilities, sectors known for their resilience, stable occupancy and long-term leases. 

However, not all healthcare properties are created equal and choosing where and what to invest in requires more profound insight. So, where exactly are the best opportunities for medical office investments in 2025 hiding, and how do you know which ones will stand the test?

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What Is Medical Office Real Estate and Why Should You Invest?

Medical office real estate is spaces designed for doctors, specialists and outpatient healthcare providers. Because these facilities deliver essential healthcare services that people consistently rely on, they tend to offer steady rental income, long-term tenants and high renewal rates, giving investors a sense of security that's hard to match. 

There are several compelling reasons why you should consider adding medical office investments to your portfolio.

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Growing Demand for Healthcare Services

Healthcare services remain consistently in demand, even during economic downturns. This ongoing need is driven by an aging population, continued medical innovations, the rise of chronic conditions and emerging health issues. 

These healthcare real estate trends contribute to the sustained demand for healthcare facilities, which helps medical office buildings attract reliable tenants and provide investors with consistent rental income.

A 2022 healthcare services report by Colliers highlights these healthcare real estate trends, noting that average rents for medical office properties rose to $23.06 per square foot, representing a 1.7% increase in the year's first half and a record high for the sector.

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Long-Term Tenancy Stability

Medical office buildings often attract healthcare providers who commit to long-term leases for healthcare properties. Since relocating medical practices is costly and disruptive, these tenants are more likely to stay for many years. 

For investors like you, this translates to consistent rental income, lower vacancy rates and reduced turnover expenses. Compared to other commercial properties with shorter lease cycles, medical office investments offer greater stability and financial predictability, making them a solid choice for long-term wealth building.

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Resilience Against Economic Downturns

Healthcare remains a necessity, even during economic slowdowns. For example, during the COVID-19 pandemic, medical office real estate demonstrated remarkable resilience. According to Revista and Healthcare Real Estate Report 2021, medical office buildings had an average occupancy rate of over 91% throughout the pandemic, outperforming many other commercial property types.

This strong performance is primarily due to the essential nature of healthcare services, which continue uninterrupted during economic uncertainty. Outpatient facilities, clinics and specialty care centers continued to operate and provide care, making this a dependable and recession-resistant option for diversifying your portfolio.

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Technological Advancements & Outpatient Shift

Medical care is shifting from large hospitals to more convenient outpatient healthcare facilities requiring modern and flexible spaces. The demand for purpose-built offices is growing fast, from telehealth hubs to surgical suites. 

As technology makes patient care more accessible, these smaller, tech-ready clinics are becoming the new standard. If you position yourself now, you’ll be ahead of a trend that’s only accelerating.

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Top 6 Markets for Medical Office Investments

1. Behavioral Health Clinics

Outpatient behavioral health services are expanding in response to increased awareness of mental health and broader insurance coverage. These clinics, commonly found in medical office buildings, offer counseling, addiction treatment and psychiatric services without the need for inpatient care.

Markets, such as Denver, Seattle and Chicago, are experiencing strong demand for behavioral health facilities, often outpacing available supply. As the behavioral health market size reaches $190 billion in 2023, behavioral health clinics as one of the medical real estate investments, represent a socially driven and government-supported segment that remains underbuilt and presents opportunities for investors like you.

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2. Outpatient or Ambulatory Surgical Centers (ASCs)

According to the Ambulatory Surgery Center Association Report, if just half of the eligible surgical procedures were to move from hospital outpatient departments to ASCs, Medicare would save an additional $2.5 billion per year.

Outpatient surgical centers are a growing part of the healthcare ecosystem, designed for efficient and short-term procedures that do not require overnight stays. These facilities are commonly housed in purpose-built mobile operating rooms or standalone surgical suites, offering flexibility in real estate use. 

Markets like Dallas, Houston and Atlanta, with large suburban populations, support the growth trend of ASCs. Investors are particularly drawn to medical office investments like ASCs because of their high turnover rates, cost efficiency and stable reimbursement models.

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3. Senior Care & Geriatric Clinics

With over 60 million baby boomers aging into retirement, demand for geriatric care services like memory support and chronic disease management is rising fast. While full-time senior living facilities fall outside the medical office space, geriatric clinics are often well-suited to healthcare MOBs. 

Cities like Tampa, Florida; Phoenix; and Charlotte, North Carolina, are seeing strong population growth among older adults. Investors like you can benefit directly from the long-term care needs, Medicare reimbursement and low tenant turnover of senior care investment opportunities like these.

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4. Primary & Urgent Care Centers

Wait time is a significant consideration for patients visiting an urgent care center. According to the Urgent Care Association's 2022 report, patient satisfaction in urgent care centers was 76%, which highlights the advantages of this medical office investment market.

As core tenants of most medical office buildings, primary and urgent care clinics are vital in delivering accessible and everyday healthcare. They help reduce pressure on emergency rooms and serve growing communities, especially in suburbs and rural regions. 

Ideal investment locations include the expanding suburbs of Raleigh, North Carolina; Nashville, Tennessee; and Austin, Texas. These clinics generate high patient traffic, form strong partnerships with insurers and offer flexible leasing structures.

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5. Specialty Medical Practices

Specialty providers such as oncology, dermatology, cardiology and orthopedics serve as key anchor tenants within medical office building portfolios. These practices often invest significantly in their spaces and equipment, making relocation less feasible. 

Cities like Boston, San Diego and Scottsdale, Arizona, characterized by affluent and aging populations, are prime targets for the growth of specialty clinics. Notably, specialty providers accounted for 31% of all healthcare MOB leases in 2024, underscoring their substantial presence in the sector. For investors, this translates to long-term lease commitments, low vacancy risk and a robust income stream.

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6. Telehealth & Hybrid Clinics

Hybrid clinics combine virtual healthcare with smaller physical hubs for diagnostics and procedures, which are perfect for modern post-COVID care models. These setups often occupy smaller spaces in MOBs, especially in tech-driven cities. 

San Francisco, Austin and Minneapolis are hotbeds for this model due to their digital infrastructure and patient demand for flexibility. Reports revealed that the global telemedicine market size is expected to reach $160.13 billion by 2025. Telehealth and hybrid clinics are an excellent choice for you as they can bring value through innovative leasing formats, compact footprints and adaptability to future care trends.

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Factors To Consider in Medical Office Investments

Location and Market Analysis

When investing in medical office buildings, assessing the demographics, healthcare needs and ease of access for patients and providers in your area is essential. High physician density and substantial patient volume are strong indicators of sustained demand and long-term tenant stability. Evaluating nearby infrastructure, public transportation and overall community growth helps identify markets with strong potential for returns.

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Legal and Regulatory Factors

Medical office investments necessitate strict adherence to healthcare-related laws, local zoning regulations and building codes. Ensuring the property meets medical licensing standards and Americans with Disabilities Act (ADA) requirements helps you avoid costly legal issues. A clear understanding of these rules supports smoother operations and long-term success for landlords and tenants. It might be difficult, but a strategic partnership with investment firms that are experts in this real estate sector, such as Alliance CGC, can significantly help you succeed in this space. 

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‍Financial Analysis and Return on Investment

Analyzing financial metrics, such as net operating income (NOI), capitalization rates and projected cash flow, is key to evaluating a property's profitability. Investors should also consider upfront costs, tenant improvement expenses and long-term returns of other commercial real estate assets. A data-driven approach helps you align investment choices with financial goals and acceptable risk levels.

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Start Building Your Healthcare Investment Future Today

Medical office investments offer a rare combination of stability, long-term growth and social impact, making them an ideal choice as healthcare needs continue to grow across communities. As demand for outpatient care continues to rise, positioning yourself in the right market with the proper support is key.

If you’re looking to invest in medical office real estate, having a trusted partner can make all the difference. At Alliance CGC, we bring over 30 years of experience in commercial real estate, managing billions in assets with a historical 28% internal rate of return (IRR). 

Our strategy is built around resilient, long-term investments, which are well-suited for navigating the unique demands of the medical office sector and other sectors such as multifamily, industrial, veterinary and retail.

Let’s turn your next investment into a lasting impact. Partner with Alliance CGC and unlock the potential of healthcare real estate.

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