The Rise of Smaller Healthcare Spaces — And Why Bigger Isn’t Always Better Anymore

There was a time when every healthcare group wanted bigger spaces. More rooms. More square footage.

But 2025? That trend is shifting fast.

Across behavioral health, outpatient care, and medical office, I’m seeing more and more operators say: “Give me exactly what I need — and not an inch more.”

Why? A few reasons…

→ Healthcare has gotten more specialized.

→ Staffing is tighter.

→ Rents have gone up.

→ Patients want convenience over luxury.

Smaller healthcare spaces mean lower overhead. Simpler operations. And faster speed to market.

Behavioral health groups, in particular, are driving this trend. Many can operate perfectly with a few therapy rooms, a group room, and a clean admin space. No massive waiting rooms. No extra buildout costs.

I’m seeing the same thing with outpatient surgical centers and med spas — operators are figuring out that smart, flexible space beats oversized footprints every time.

And from a real estate standpoint? Smaller spaces lease faster. Sell quicker. And open the door to tenants who otherwise might’ve been priced out.

This isn’t to say big healthcare campuses are dead — not at all. But there’s a clear lane opening up for smaller, well-designed healthcare properties that fit the way providers operate today.

Because in healthcare real estate right now? Efficient is attractive.

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