Medical real estate investment transaction activity across the United States has been subdued during the past 12 months ending September 2025. Just over 1,000 properties traded at values above $2.5 million, according to new data from Revista. This total reflects a muted pace relative to the sector’s historical averages, continuing a trend shaped by shifting capital markets and selective investor appetite.
During the year ending September 30, 2025, a total of 1,055 qualifying properties changed hands, representing 54.14 million square feet at a gross value of $16.27 billion. Medical office buildings accounted for the largest share, with 807 trades totaling $8.5 billion, an average transaction size of $10.5 million, and pricing of $360 per square foot.
Office buildings with a medical component saw 166 transactions and $2.4 billion in volume, with an average price of $205 per square foot. General hospitals posted 52 transactions valued at $4.58 billion, reflecting a sector-high average price per property at $88 million and setting the market’s highest price per square foot at $818.
Cap Rate Market Differentials
Cap rate yields reveal a marked separation between property types. MOB trades saw an average cap rate of 6.9 percent, while the office-with-medical segment averaged 7.9 percent. General hospitals posted lower yields, reflecting their premium status within the sector.
Rehabilitation hospitals led activity among specialty asset types, with 19 properties going for $580 million in total at an average price of $569 per square foot and a typical property size under one million square feet.
Behavioral health and LTAC hospitals remained highly illiquid, with just seven and four trades, respectively. These assets drew pricing of $218 and $139 per square foot, with individual transaction averages reflecting the specialized nature of the buildings and smaller unit sizes.
Market Context and Outlook
The past year’s $16.27 billion total falls significantly short of the annual average for these healthcare property segments, which has reached $24 billion with 75 million square feet traded between 2016 and 2024. This shortfall underscores a contraction in both deal size and property coverage for 2025, despite anticipation of rising activity in the fourth quarter, fueled by further interest rate reductions and marquee transactions such as the Welltower-Remedy deal.
With signs of increased liquidity returning to the market, investors, owners and lenders are likely to see more dynamic activity in the coming months. The differentiated cap rate environment and the premium commanded by core MOB and hospital assets suggest mounting competition for quality offerings and further divergence between institutional and niche property valuations. Whether the sector can return to prior volume benchmarks remains uncertain, but market participants are positioned for notable changes ahead.
Source: “Healthcare Real Estate Activity Slows, Led by MOB and Hospital Trades”
