Rising Operating Costs Are Quietly Reshaping Healthcare Real Estate Valuations

We’ve all been talking about interest rates, cap rates, and credit tightening. But there’s another factor quietly pushing its way into every valuation conversation right now: operating costs.

In 2025, healthcare property owners—especially those in senior living, behavioral health, and outpatient care—are feeling the pinch.

Staffing costs are up.

Utilities are up.

Insurance premiums are up.

Maintenance and compliance costs? Also up.

And even if those expenses aren’t directly on the landlord’s books, they’re affecting the tenant’s margins—which impacts rent stability, renewal likelihood, and overall perceived risk.

This is especially important in triple net leases, where the operator is technically responsible for everything. Because if the operating burden gets too high, even a strong lease might become unstable.

From a valuation standpoint, we’re looking more closely at:

→ The tenant’s ability to absorb rising costs

→ The sustainability of base rent vs. market realities

→ The property’s infrastructure efficiency (or lack thereof)

→ Lease clauses around escalation and pass-throughs

This isn’t panic territory—but it is a new lens. One that buyers, lenders, and appraisers are all using more aggressively in 2025.

If you haven’t reassessed how your property’s operating profile impacts its value, now’s the time.

📅 Book a call to talk through how cost pressures might be affecting your asset’s value today.

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Margins are tightening—and valuations are evolving in response. Let’s make sure you’re not caught flat-footed.