Outpatient healthcare real estate has solidified its role as a cornerstone of modern healthcare delivery, with outpatient services projected to account for 65% of hospital revenues by 2025. This significant shift is a response to advancements in medical technology, evolving patient preferences, and the need to reduce healthcare costs. Unlike in the past, outpatient facilities now offer more than basic diagnostic services or minor treatments. They have become cutting-edge spaces for complex surgical procedures, chronic disease management, and specialty care. As we enter 2025, understanding the trends, challenges, and opportunities within this sector is vital for healthcare providers, real estate developers, and investors aiming to adapt to this dynamic landscape.
The Evolution of Outpatient Care
The evolution of outpatient care is a story of innovation and necessity. Historically, hospitals dominated as the primary setting for medical procedures, but over the last few decades, advancements in healthcare delivery have changed this dynamic. Improvements in minimally invasive surgical techniques, enhanced anesthesia methods, and the development of advanced diagnostic tools have allowed many procedures to migrate from inpatient to outpatient settings.
This migration isn’t just about technology—it also reflects the growing demand for cost-effective healthcare. Outpatient services are typically 30–60% less expensive than inpatient care, offering significant savings for patients and healthcare systems alike. Beyond affordability, patients increasingly value convenience, shorter wait times, and accessible locations. Suburban outpatient facilities or those integrated into mixed-use developments address these preferences effectively.
Regulatory policies have further accelerated this shift. Site-neutral payment policies introduced by the Centers for Medicare & Medicaid Services reward outpatient care delivery, encouraging healthcare providers to develop patient-centered facilities. As a result, outpatient healthcare real estate has seen a surge in demand, reshaping the healthcare landscape and setting new standards for the industry.
Key Drivers of Outpatient Real Estate Growth
Several demographic and industry-specific trends are driving the rapid growth of outpatient healthcare real estate.
One of the most significant factors is the aging population. By 2030, all baby boomers will be over the age of 65, expanding the older population to an estimated 73 million individuals. This demographic shift is fueling demand for outpatient services that cater to chronic conditions, such as diabetes, arthritis, and cardiovascular disease. Outpatient facilities are uniquely positioned to address these needs, offering accessible and ongoing care.
Chronic diseases, in particular, are contributing to the demand for outpatient services. Conditions such as diabetes, hypertension, and obesity require continuous monitoring and management, which are ideally provided in outpatient settings. In parallel, the transition from fee-for-service to value-based care models is incentivizing healthcare systems to focus on preventive and integrated care. Outpatient facilities, designed to deliver these services, are becoming critical to achieving these goals.
Consumer-driven healthcare is another powerful force shaping the sector. Patients today act more like consumers, prioritizing convenience, accessibility, and high-quality experiences. This shift has led to a rise in outpatient facilities located in suburban areas, retail spaces, and other easily accessible locations. Additionally, advancements in telemedicine, remote monitoring, and AI-assisted diagnostics are enabling outpatient facilities to offer increasingly sophisticated care. These trends are setting the stage for sustained growth in outpatient healthcare real estate.
Emerging Trends in Outpatient Facilities
The design and development of outpatient facilities are evolving rapidly to meet the demands of modern healthcare. One of the most notable trends is the rise of mixed-use health villages, where healthcare services are seamlessly integrated with retail and wellness centers to create holistic environments for patients. For instance, Boldt’s HonorHealth at Pima Medical Campus exemplifies this approach by combining advanced medical care with community-focused amenities.
Retail healthcare is also gaining traction, with outpatient clinics opening in high-traffic retail locations to improve patient access. Meanwhile, specialized centers of excellence are becoming increasingly common, offering comprehensive care for specific conditions such as orthopedics or oncology. These facilities provide patients with a one-stop destination for diagnosis, treatment, and follow-up care.
Another emerging trend is the decentralized care model, where healthcare systems establish networks of smaller outpatient facilities in suburban and rural areas. This approach not only captures market share but also ensures that care is accessible to underserved populations. Projects like Boldt’s partnership with University of Nebraska Medical Center illustrate how this model can revolutionize healthcare delivery in regional areas. Boldt successfully opened its first strategically located facility in just 13 months, showcasing the importance of speed-to-market. By utilizing modularization and optimizing facility designs, Boldt achieved significant cost savings while ensuring that each facility is customized to enhance patient convenience and operational efficiency.
Market Dynamics and Investment Opportunities
Economic factors are playing a significant role in shaping the future of outpatient real estate. With interest rate cuts and a positive shift in market sentiment, transaction activity is expected to rise as debt and equity markets regain confidence. However, challenges like elevated labor, material, and financing costs have slowed the growth of new construction projects.
This supply slowdown is benefiting owners of existing medical office buildings (MOBs). Occupancy rates in the largest 100 metro areas have climbed to 92.5%, up over 120 basis points from early 2021. This trend suggests that the balance between supply and demand is shifting in favor of property owners, leading to potential increases in both occupancy rates and rental values.
Health systems are currently facing emerging opportunities in both value-add properties and core assets. Boldt’s Value+ Model emphasizes how health systems can mitigate the risks associated with facility vacancies and enable immediate monetization. This allows them to redirect capital toward mission-critical initiatives, all while having the assurance that Boldt will not resell the properties, ensuring that the health system retains control indefinitely.
For those planning MOB expansions, location is critical. High-growth markets are absorbing new supply at a faster rate, offering favorable conditions for investment. To learn more about location strategies, explore Boldt’s blog on choosing ideal sites for healthcare facilities.
Challenges Facing the Outpatient Real Estate Sector
Despite its growth potential, the outpatient healthcare real estate sector faces several challenges. Regulatory compliance complexities, high construction costs and staffing shortages can impact facility expansion and operation strategies.
Market saturation in urban areas is another concern, leading to increased competition and tighter margins. Additionally, rapid advancements in medical technology require facilities to be adaptable to future upgrades. Healthcare providers must also manage the risks associated with the shift to value-based care models, which demand integrated and patient-centered care delivery.
To address these challenges, Boldt offers tailored solutions designed to optimize facility performance while minimizing risks. These include:
- Rental rates consistently below market
- Property tax-exempt treatment on all offerings
- No rent escalations or property management fees
- Off-balance sheet lease options under FASB Topic 842
- Option to purchase the facility for 110% of cost at the end of the lease term, allowing you to realize the value your lease brings
Future Outlook: 2025 and Beyond
The future of outpatient healthcare real estate will be defined by continued innovation, adaptability, and a focus on patient-centered care. Advancements in personalized medicine and genomics will create demand for specialized outpatient facilities, while sustainability goals will push the industry towards greener designs.
Community integration will become a focal point, with outpatient facilities serving as hubs for wellness programs, health education, and social engagement. Data-driven approaches will also transform facility planning and operations, enabling healthcare systems to optimize space utilization and enhance patient experiences.
Outpatient healthcare real estate is poised for significant growth and transformation in the years ahead. Stakeholders who embrace innovation, prioritize sustainability, and forge strategic partnerships will be well-positioned to capitalize on the immense opportunities in this sector.
Ready to take the next step? Download our brochure to explore how our comprehensive solutions can help you succeed in the evolving outpatient healthcare market.
