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Strategic Shifts in Healthcare Real Estate: Navigating MOB & ASC Development in 2025

April 29, 2025
Greg Markvluwer, MBA Avatar
Greg Markvluwer, MBA
Vice President, Real Estate Development

Integrated health systems and private equity-backed providers are recalibrating their real estate strategies in 2025 to align with evolving healthcare delivery models, financial pressures, and policy changes.

The focus is increasingly on developing medical office buildings (MOBs) and ambulatory surgery centers (ASCs), with a keen eye on structuring the real estate to support employed physicians and enhance outpatient care delivery.

Emphasis on Outpatient Expansion

The trend toward outpatient care continues to gain momentum. Sg2 reports that outpatient volumes in the U.S. are anticipated to grow 11% over the next five years and 17% over the next 10 years, with this demand outpacing population-based demand projections. This shift is leading healthcare providers to expand outpatient services, driving innovation and increased occupancy in outpatient buildings.

Sutter Health’s announcement of an $800M investment in an outpatient hub in Santa Clara, California, underscores this shift. The project aims to centralize services such as diagnostics, imaging, urgent care, and various surgical specialties, facilitating integrated care delivery and supporting physician recruitment efforts. This initiative is part of Sutter’s broader plan to open 27 new ambulatory care centers across Northern California by 2027.

Innovative Real Estate Partnerships

Health systems are increasingly exploring creative partnerships to optimize real estate assets. The collaboration between Sutter Health and the Sobrato Organization, involving leasing office buildings from a community college district, exemplifies this approach. Such arrangements allow health systems to repurpose existing structures, expedite project timelines, and reduce capital expenditures.

ASC Giants Reshaping the Landscape

Major for-profit and private equity-backed ASC operators are significantly influencing healthcare real estate and physician engagement strategies. United Surgical Partners International (USPI), the largest ASC operator in the U.S., expanded its portfolio to 518 ASCs and 25 surgical hospitals across 37 states by the end of 2024. USPI’s aggressive growth strategy includes mergers, acquisitions, and de novo developments, with plans to add 10 to 12 new centers in 2025. This expansion is supported by an annual investment of $250M in ambulatory acquisitions by its parent company, Tenet Healthcare.5

AmSurg, partnering with over 1,800 physicians at more than 235 outpatient surgery centers nationwide, offers services such as advocacy in government affairs, digital sharing of best practices, and quality measurement. The company’s approach includes providing physicians with ownership opportunities and aligning operational strategies to enhance clinical outcomes. These entities often structure joint ventures that allow physicians to retain equity stakes in ASCs and associated real estate, fostering alignment and shared financial incentives. Such models not only enhance physician engagement but also contribute to the scalability and financial performance of the centers.

Structuring Deals with Employed Physicians

Health systems and ASC operators are adopting flexible real estate strategies to accommodate employed physicians. This includes offering equity stakes in MOBs, implementing revenue-sharing models, and providing lease arrangements that align with physicians’ operational needs. Such structures aim to foster alignment between physicians and health systems, enhance retention, and promote integrated care delivery.

MOB Space Shortage Creates Strong Investment Opportunity

The capital markets are influencing healthcare real estate development decisions. Increased interest rates and construction costs have negatively impacted the pace of new development. Prior to 2021, approximately 4.3M sf of space were delivered quarterly across the top 100 markets, but this has declined to an average of 3.5M sf per quarter. According to Revista, “the strong demand and limited construction have driven occupancy steadily upward, with absorption for medical outpatient buildings topping 19M sf for the top 100 markets in Q4 2024, an increase of 15% from full-year 2023.” Based on increased outpatient volumes and decreased supply, this creates a compelling opportunity to invest in MOBs and outpatient clinics.

Policy & Regulatory Impacts

Recent policy developments, including the Centers for Medicare & Medicaid Services’ Transforming Episode Accountability Model (TEAM), are prompting health systems to reassess their real estate strategies. The TEAM model introduces bundled payments for specific procedures, incentivizing cost-effective care delivery in outpatient settings. This shift is likely to accelerate the development of ASCs and other outpatient facilities.

Outlook for 2025

Looking ahead, health systems and private equity-backed ASC operators are expected to continue investing in MOBs and ASCs, leveraging partnerships and innovative structures to optimize real estate assets. The emphasis will be on flexibility, scalability, and alignment with evolving care delivery models. As the healthcare landscape evolves, real estate strategies will play a pivotal role in enabling health systems to meet patient needs, support physicians, and achieve financial sustainability.

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