This audio is automatically generated. Please let us know if you have any comments.
According to healthcare real estate specialists, demographic, economic and federal policy trends are supporting a market shift toward ambulatory medical buildings and away from US hospitals.
For the US population, “we’re in the midst of what’s called a silver tsunami,” Ian Anderson, senior director of research and analysis for the US Office of Life Sciences and Healthcare at CBRhe said in a webinar about the company Real estate market prospects 2026. “The US senior population is projected to grow by approximately 50% over the next 10 years.” As people age, their spending on health care tends to increase.
Meanwhile, concerns about health care costs are rising. Changes in the One Big Beautiful Bill are expected to increase the number of people without health insurance by nearly 14 million, Anderson said, and medical supply costs are rising.
with payment policy changes by the Centers for Medicare and Medicaid Services that include allowing more procedures to be performed outside of hospitals, health care providers are putting more emphasis on more affordable outpatient facilities as part of optimizing their portfolios, CBRE said in a health real estate report.
“The most consequential change in federal health care policy since Obamacare will unfold over the next several years,” Anderson said. “There will be headwinds. But how those headwinds intersect with these favorable demographic megatrends can benefit the medical ambulatory construction industry in a couple of surprising ways.”
JLL, in a conditioning of medical ambulatory buildings The cost guide released Wednesday looked at expectations for where health care services will be provided in the near future. Outpatient volumes are expected to increase 8% over the next five years, compared with just 1% for inpatient volumes, he said. Much of the increase in demand will come from shifts in focus to office and clinic sites that have low-intensity equipment, JLL said. Moderate-intensity facilities, such as stand-alone physical therapy facilities and labs, are also expected to see strong growth, helping to drive demand for medical office buildings, or MOBs, and the conversion of other commercial and office space to medical uses, JLL said.
Increased costs due to complexity
Against these growth drivers are industry constraints, such as tightening subcontractor capacity, which are driving up equipment costs, particularly in high-growth metro areas, and concentrating demand on fewer new projects, JLL said in its cost guidance.
In 2026, the average cost of comprehensive MOB fixtures in the US is $412 per square foot, according to the guide. This amount includes midpoint benchmarks for hard costs, soft costs, design and service fees, audio-visual and IT equipment, contingency costs and furniture, fixtures and fittings. Excludes structural and infrastructure improvements, demolition and phasing limitations and overtime and wage premiums. Hard costs make up a little more than half of total fit-out budgets, at $226 per square foot, the guide says.
Delivery constraints are pushing suppliers and investors into renovations and conversions rather than new builds, JLL said. But the operational constraints, phase upgrades and infrastructure these projects require are increasing complexity and driving greater cost variability and higher contingency needs, he said.
The shift to ambulatory facilities is also fundamentally changing space requirements and costs, the JLL report states. Higher-acuity ambulatory care facilities that provide high-acuity care, such as imaging, surgery and cancer care, for example, operate like mini-hospitals from an electrical and mechanical, electrical and plumbing standpoint, substantially increasing the cost per square foot of the facilities, he says. More technological ambulatory care also increases costs for furniture, fixtures, equipment, audio-visual and IT, JLL said.
The company estimates that fit-out costs for moderate-acuity facilities, such as those with extended imaging or specialty rooms, are about 10% higher than benchmark ambulatory facilities, which only include exam and waiting rooms and basic IT infrastructure. High-acuity MOBs, with equipment that requires additional structural considerations due to their weight and power use, are estimated to cost an additional 20% over moderately complex equipment, JLL said.
Labor remains the main cost escalator and the largest source of schedule-based premiums, with wage pressure and uneven capacity of subcontractors, particularly mechanical, electrical, plumbing and specialty trades, continuing to drive bid volatility, the report says.
