Why Older MOBs Are Quietly Losing Market Share

Not all medical office buildings are created equal—and in 2025, the gap between top-tier assets and legacy buildings is getting wider.

We’re seeing a trend that isn’t subtle anymore: investors and operators are bypassing older, outdated MOBs in favor of newly built or significantly renovated space. The reason? Operators are under pressure to meet evolving patient expectations and stricter code requirements—especially in behavioral health and senior care.

If a facility doesn’t offer flexible layouts, modern infrastructure, or energy efficiency, it’s not just “less desirable”—it’s a liability.

From a valuation standpoint, the spread is growing. Properties built pre-2000 without major upgrades are appraising lower than owners expect—and in some cases, significantly below replacement cost. On the other hand, newly delivered product with behavioral health or post-acute design flexibility is commanding top dollar, especially in high-growth metros.

This isn’t just a design issue. It’s about tenant retention, payer mix, and capital stack risk. And for those of us in the valuation world, it’s a sign that legacy MOB portfolios need to be reexamined—not just for marketability, but for fundamental obsolescence risk.

If you’re holding or acquiring MOBs, especially in behavioral or SNF-adjacent markets, this is the time to reevaluate your assumptions.

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