Why Medical Real Estate is Increasingly Investor-Owned

A growing trend in healthcare real estate is the shift away from healthcare providers owning their buildings and toward investor-owned medical real estate. Historically, hospitals and private practice groups owned the facilities they operated in, but today, investors and REITs (Real Estate Investment Trusts) are purchasing more healthcare properties than ever.

The main reason? Liquidity and financial flexibility. Healthcare providers are prioritizing patient care, technology investments, and expansion rather than tying up capital in real estate. By selling their properties and leasing them back, hospitals, surgery centers, and medical offices can free up capital while maintaining full operational control of their facilities.

For investors, medical real estate is a highly attractive asset class. Unlike traditional office buildings, medical properties are typically recession-resistant, have long-term leases, and house essential services that aren’t easily replaced by telehealth. This has led to record levels of investment in medical office buildings, specialty care facilities, and even hospitals.

At the same time, this trend is reshaping the leasing landscape. Healthcare operators are now negotiating longer lease terms with favorable renewal options, ensuring stability for both tenants and landlords. Investors, in turn, are focusing on properties in high-demand healthcare markets where strong patient volume and growing populations create sustained demand for medical services.

While investor-owned medical real estate presents advantages, it also comes with challenges. Rising interest rates, increased competition for prime properties, and evolving healthcare regulations all impact how these deals are structured. Valuations must account for both the real estate fundamentals and the long-term viability of the healthcare tenants.

As more healthcare providers transition to sale-leaseback models and investor-owned structures, understanding this shift is crucial for both landlords and tenants. Those who can navigate the changing landscape will be well-positioned for long-term success in the healthcare real estate market.

If you’re considering an investment in medical real estate or need an appraisal for a healthcare facility, let’s connect. You can book a quick call with me here: https://calendly.com/contact-loveladyperspective.

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