THE STATE OF THE HEALTHCARE REAL ESTATE MARKET HEADING INTO 2026
The biggest medical office building transaction in history has landed at exactly the right moment for a sector thirsty for momentum. A $7.2 billion acquisition of nearly 300 medical outpatient buildings — totaling more than 18 million square feet — has instantly become the defining event of an otherwise muted sales environment. For the past couple of years, annual MOB transaction volume has hovered around one-third of the record activity seen in the 2021–2023 surge. This landmark trade doesn’t transform the market overnight, but it sends a powerful signal: large-scale capital still believes deeply in the stability and durability of medical real estate.
The deal has created renewed attention for the sector, particularly at a time when many other real estate categories are struggling under higher interest rates and persistent volatility. While enthusiasm is building, the market remains shaped by a widening disconnect between public and private valuations. Publicly traded healthcare REITs continue to operate at notable discounts to their underlying asset values, prompting many of them to focus on selling selected properties, recycling capital, and repurchasing their own shares. These strategies make sense only because private buyers are willing to pay cap rates significantly stronger than those implied by public market pricing.
Despite the pricing tension, private capital continues to favor medical office buildings for their recession-resilience, stable cash flow, and consistent tenant demand. At the same time, high development costs and constrained construction pipelines are limiting new supply, helping bolster occupancy and rent growth across most markets. Cap rates for well-located MOBs have begun tightening again, and portfolio premiums — which briefly faded during the slowdown — have reappeared as investors once more reward scale and diversification.
As the industry moves toward 2026, the message is clear: medical real estate remains one of the most stable and institutionally trusted commercial asset classes in the United States. The record-breaking transaction may not redefine the sector, but it underscores a long-standing truth — in a world of uncertainty, healthcare real estate continues to deliver consistency, resilience, and long-term value for investors.
