Why Medical CRE Tenants Are Getting Pickier: Part II

In Part I, we looked at how tenant preferences in medical real estate have sharpened. Rising costs, staff shortages, and tighter margins are forcing operators to be more selective. But the story doesn’t end there—those pressures are intensifying, and so are the demands.

Here are three trends driving the next phase of tenant pickiness:

1. Tech-Ready Spaces Are Non-Negotiable

Medical tenants don’t just want four walls anymore. They want plug-and-play infrastructure for telehealth, AI-enabled diagnostics, and integrated EMR systems. If a space can’t support connectivity, smart devices, and secure data handling, it’s a non-starter.

2. Patient Experience Is the Deciding Factor

More groups are making site selection decisions based on how the environment feels to patients. That means visibility, easy parking, calming interiors, and flexible layouts to reduce wait times. In competitive markets, the “patient journey” is often what tips the scales between two otherwise equal sites.

3. Landlord Flexibility Is Now a Requirement

Rigid TI allowances and standard leases don’t cut it anymore. Tenants are asking for—and often getting—more customization, shorter initial terms, and creative deal structures. Owners who can’t meet those expectations risk longer vacancies and missed opportunities.

The bottom line: tenant leverage in medical CRE is growing, and the gap between “acceptable” and “ideal” is widening. Owners who don’t adapt will get left behind.

👉 Curious how these shifts affect your strategy? Let’s talk.

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