Why Landlords Are Getting More Flexible in Medical Leasing

If you’ve been in the medical CRE space long enough, you know landlords used to have all the leverage. Build-outs were rigid, TI allowances were slim, and healthcare tenants were expected to adapt to the space.

That’s starting to shift.

With vacancy rates creeping up in some office markets and healthcare groups proving to be sticky, long-term tenants, landlords are realizing that flexibility is the new competitive advantage.

Here’s what we’re seeing:

• Bigger TI Packages – Owners are offering more generous tenant improvement allowances, especially for specialties with complex build-outs like ASCs or imaging.

• Creative Deal Structures – From rent abatement during licensure delays to phased rent increases, deals are being shaped around the realities of medical operations.

• Partnership Mentality – Landlords are more open to joint-venture structures with health systems or physician groups, sharing in upside instead of just collecting rent.

• Faster Approvals – Municipalities and landlords alike are accelerating permitting and construction approvals to help healthcare tenants open doors sooner.

Why it matters: this flexibility doesn’t just lower upfront risk for operators—it also makes certain markets more attractive to investors. If a landlord is willing to share in the heavy lift, expansion suddenly feels a lot more attainable.

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