How Build-to-Suit Demand Is Changing in Healthcare Real Estate

The phrase “build-to-suit” used to mean long-term commitment, fixed layout, and a stable return for the developer or owner. In 2025, that model’s still alive—but it’s changing fast.

Healthcare operators, from behavioral health to multispecialty groups, are still pursuing build-to-suit deals—but they’re demanding more flexibility and faster timelines.

Here’s what’s shifting:

→ Operators want optionality. Many providers want spaces that can evolve with clinical trends—like adding telehealth pods, exam room reconfiguration, or shared back-office space.

→ Lease terms are shorter. The 15–20 year lease is being replaced with 10-year deals, often with carve-outs or early-exit language tied to reimbursement or regulatory changes.

→ Shared risk is becoming standard. Some tenants are requesting cost-sharing or phased TI funding structures, especially when investing in specialty buildouts.

→ Location strategy is data-driven. Operators are less concerned with trophy addresses and more focused on access to referral networks, demographics, and staffing pipelines.

From a valuation and dealmaking perspective, this means developers and owners need to:

• Design with flexibility in mind

• Understand clinical use cases

• Be realistic about exit strategy and re-tenanting risks

It’s no longer enough to just build for a provider—it has to work for where healthcare is going, not just where it is today.

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Because in this market, a “custom build” needs to come with a backup plan.