Investor competition for medical office real estate is heating up, fueled by lower debt costs, shifting interest rates and sustained institutional demand. That momentum, says Andrew Saba, managing director of Healthcare at Stockdale Capital Partners, is setting the stage for rising deal activity and potentially higher asset values across the sector.
"There is growing competitive interest in medical office real estate driven by debt pricing, interest rate fluctuations, and growing institutional interest," Saba tells GlobeSt.com.
Stockdale Capital, a major investor in healthcare properties, is actively working to double or even triple its portfolio within the next 24 months.
Saba said the influx of capital formation over the past several years—from groups such as Stockdale Capital, IRA Capital, CypressWest, SG/Artemis, Lincoln/PGIM, and others—underscores broad confidence in the U.S. healthcare real estate market.
"In sharp contrast to only two or three years ago, when liquidity was limited, we are now seeing a significantly higher frequency of lenders entering the market to compete, particularly for core and core-plus assets," he said.
That competition has created attractive lending terms for investors targeting outpatient medical properties.
"This combination of declining debt pricing for outpatient medical assets and an increasing number of investment partnerships focused on the sector is creating a market environment that will support rising prices," Saba said.
Still, global instability could complicate the outlook. "Should these global issues persist, it could cause cap rates and debt pricing to elevate, just given the increased risk in the near term," he said, referring to the conflict in the Middle East.
Stockdale is concentrating its expansion in the nation's 50 largest metropolitan areas, with a strong focus on Sunbelt markets such as Tampa, Charlotte, Phoenix, Dallas, Atlanta and Nashville.
"Given the population migration into these more favorable retirement markets, the company has maintained its conviction that the continued tailwinds will support the healthcare real estate ecosystem," Saba said.
The firm's acquisition strategy centers on medical outpatient properties, ambulatory surgery centers and higher-acuity buildings, such as inpatient rehabilitation facilities.
"Because we invest across the risk spectrum from core-plus to opportunistic, we also look for opportunities to convert office buildings into outpatient facilities where medical space may be limited, and the submarket exhibits characteristics similar to those we're targeting," Saba said.
Investor enthusiasm for healthcare real estate has grown steadily since the Great Financial Crisis, when the sector's assets demonstrated remarkable resilience. The pandemic reinforced that stability, as many outpatient buildings reopened quickly or never closed, and tenant performance remained steady throughout the 2020–2022 period and beyond.
Saba said that today, healthcare real estate stands as a defensive, stable asset class supported by strong long-term fundamentals. With an aging population driving demand for medical care, Stockdale expects outpatient medical properties to remain a growth area well into the next decade.
Citing the CMS Office of the Actuary's November 2025 report, Saba anticipates that these demographic and structural tailwinds "will continue to drive demand for these assets" over the next seven to ten years and beyond.
According to an EY analysis, providers' shift toward outpatient care is another influence that "will continue to bolster the outpatient medical sector for many years to come," according to Saba.
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