For sophisticated investors seeking a combination of resilience and consistent returns, Medical Office Buildings (MOBs) – facilities designed to house physicians’ offices and outpatient healthcare services – stand out as one of the most promising opportunities in the U.S. real estate market today.

Demographic Tailwinds Drive Demand

A growing need for medical services underpins the strength of the MOB sector. Population aging is a powerful catalyst: according to the U.S. Census Bureau, the number of Americans aged 65 and older is projected to reach 83 million by 2050. This demographic segment requires more outpatient care, which is increasingly delivered in MOBs. Chronic conditions such as diabetes and hypertension further amplify this demand. Data from CBRE highlights that, in 2024, MOBs reached an occupancy rate of 92%, with average rents growing at 3.8% per year – compelling figures that reflect the sector’s strong fundamentals.

Stability in Uncertain Times

Compared to other commercial real estate segments, MOBs have proven remarkably stable during economic downturns. Leases tend to be long-term – typically between 7 to 10 years, according to JLL – and tenants are often high-quality healthcare providers or specialized physicians. This results in reliable cash flows, making MOBs a favored choice for institutional investors. In fact, transaction volume in the sector reached $15 billion in 2024, as reported by Real Capital Analytics, indicating strong investor confidence.

The ongoing shift toward outpatient care – driven by technological advances and patient preferences – continues to raise the strategic value of MOBs. Properties that are well-located near hospitals or in densely populated areas are particularly attractive, offering yields between 5.5% and 7% in primary markets, according to Marcus & Millichap Research.

This combination of long-term healthcare trends and geographic positioning enhances the appreciation potential of these assets.

A Forward-Looking Investment

Fast-paced economic cycles require a forward-thinking investment approach. In MOBs, this means focusing on the enduring demand for healthcare rather than short-term economic fluctuations like interest rates or inflation. With new MOB construction expected to grow 4% annually through 2028 (CBRE), the sector presents a unique opportunity for investors seeking recession-resistant assets.

To maximize returns in MOB investments, consider the following principles:

●    Prime Location: Target regions with high concentrations of seniors or robust hospital infrastructure.

●    Tenant Quality: Favor leases with well-established healthcare networks to ensure income stability.

●    Specialized Partnerships: Work with advisors such as Marcus & Millichap to identify high-potential assets.

CIX Capital and Medical Office Buildings

At CIX Capital, we have been investing in MOBs across the U.S. since 2019 through the CIX Flagler Healthcare Fund, a joint venture with the former Flagler Healthcare – now Sphere Investments – a health-focused real estate firm that leverages Big Data and proprietary algorithms to evaluate opportunities.

The fund’s portfolio includes 11 properties in states such as Florida, Texas, Nevada, Oklahoma, and California, with a focus on acquiring leased outpatient clinics in major U.S. metropolitan areas. Target properties are anchored by long-term leases with healthcare tenants, ideally in specialties such as Neurology, Orthopedics, Oncology, and Gastroenterology.

References

CBRE. (2024). 2025 U.S. Healthcare Real Estate Outlook. Accessible at: https://www.cbre.com/insights/reports/2025-us-healthcare-real-estate-outlook.

Jones Lang LaSalle. (2025, March). Healthcare’s outpatient revolution: Double-digit growth on the horizon. Accessible at: https://www.jll.com/en-us/newsroom/healthcare-outpatient-volumes-to-grow-by-double-digits

Marcus & Millichap. (2024). High-Speed Cycles Require Long-Term Thinking [Video]. Accessible at: https://www.marcusmillichap.com/

Real Capital Analytics. (2024). Commercial real estate transaction data. Accessible at: https://www.rcanalytics.com/

U.S. Census Bureau. (2014). An aging nation: The older population in the United States (Report No. P25-1140). Accessible at: https://www.census.gov/library/publications/2014/demo/p25-1140.html