- Medical outpatient building (MOB) growth is strongest in Sun Belt and Western US metros, led by Orlando, Dallas, and Houston.
- Major hospital systems are expanding into outpatient specialties to meet rising demand and optimize portfolio strategies.
- MOB market occupancy reached a record 92.7% in Q4 2025, with rents rising and limited new construction sustaining pricing power.
- Institutional capital is increasing, shown by marquee deals like Welltower’s $7.2B portfolio sale and compressed cap rates.
Sun Belt and Western Momentum
Medical outpatient building growth will surge across the South and West through 2029. Orlando, Dallas, Houston, and San Antonio will lead with double-digit outpatient volume gains.
According to Globe St., JLL data also shows strong clinic expansion in Southwest Florida, Tampa, Atlanta, Denver, Phoenix, and Richmond. These markets continue to attract investment due to population growth and rising healthcare demand.
Specialty Service Lines Drive Demand
Outpatient-focused specialties—including endocrinology, psychiatry, and physical therapy—represent eight of the ten fastest-growing healthcare service lines. Large health systems are strategically targeting these areas to improve patient access and margins, while selecting MOB sites based on demographic and financial factors.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Investor Dynamics and Operating Fundamentals
MOB sector fundamentals remain strong, with occupancy hitting a record 92.7% in late 2025 and rents for new developments exceeding $40 PSF. This tight supply and rising demand mirror broader occupancy trends shaping the sector’s growth. The market’s pricing power is supported by tight supply, steady absorption, and an influx of institutional investment. Notably, nearly half of 2025’s MOB lease activity originated with health systems, and hospital-owned facilities accounted for over 1.1M KSF of new deliveries.
Portfolio Strategies and Transaction Activity
Provider consolidation is driving long-term MOB leases, as the share of private practice physicians continues to decline. Larger medical groups and health systems are sought-after tenants for investors due to their scale and credit strength. Transaction activity accelerated in late 2025, capped by Welltower’s $7.2B portfolio sale to Remedy Medical Properties and Kayne Anderson, while national cap rates for MOB assets compressed by 60 bps year-over-year.
