In 2025, healthcare organizations are navigating an increasingly complex real estate landscape, marked by rising costs, changing patient behaviors, and an ongoing push toward operational efficiency. For providers, smart leasing decisions aren’t just about square footage—they’re about sustainability, growth, and positioning care delivery for the future.
At Davis, we work at the intersection of healthcare strategy and real estate intelligence. We help providers, systems, and investors understand the economic drivers shaping leasing decisions today and how to make choices that support clinical outcomes and financial health alike.
Understanding the Shifting Landscape
There are several macro-trends that are influencing healthcare leasing in 2025:
- Providers are increasingly opting for long-term leases to minimize capital outlay—freeing up funds for operational investments and minimizing short-term financial risk.
- Rising construction and operational costs are pushing organizations to reevaluate space utilization and build-versus-lease scenarios.
- Outpatient migration continues to drive demand for medical outpatient buildings (MOBs) in suburban and community-based locations.
- Value-based care models are influencing the types of spaces providers need—favoring efficiency, accessibility, and flexibility.
- Competition for prime locations near hospitals, transit, and population centers is increasing lease rate pressure.
- Evolving patient preferences call for more convenient, comfortable environments that reflect a consumer-first mindset.
With these shifts in play, making leasing decisions based on outdated benchmarks can lead to underperforming locations or costly commitments that don’t serve your strategic direction.
Key Considerations in Today’s Lease Market
To make informed, forward-thinking leasing decisions in 2025, we advise healthcare organizations to consider:
- Understand current market benchmarks—including build-out costs, gross rental rates, and common incentives—to avoid underestimating long-term cost exposure.
- Total occupancy cost (not just base rent): factoring in CAM, taxes, and operating expenses.
- Flexibility clauses that allow for growth, right-sizing, or changing care models over the lease term.
- Space efficiency and how effectively the layout supports provider workflows and patient throughput.
- Location dynamics, including access to complementary services, workforce hubs, and referral sources.
- Long-term value alignment, including how the lease structure supports your capital strategy and expansion goals.
Whether leasing new space or renewing an existing agreement, every decision is an opportunity to support care delivery and reduce long-term risk.
How Davis Helps Clients Make Smarter Leasing Decisions
At Davis, we guide clients through a leasing process that’s rooted in market intelligence, clinical context, and operational foresight. Our approach includes:
- Comprehensive lease analysis, helping clients evaluate short- and long-term cost implications.
- Strategic site selection, informed by data on population growth, referral networks, and competition.
- Customized negotiations, securing terms that align with clinical needs and long-range growth plans.
- Real estate portfolio alignment, ensuring every lease fits within a broader care delivery and capital strategy.
- Tenant representation, with a focus on protecting provider interests at every stage of the transaction.
From large health systems to independent specialty groups, we act as an extension of your strategic team, offering clarity, confidence, and negotiation leverage in a competitive market.
Leasing Longevity with Davis
The economics of healthcare leasing have never been more dynamic. In 2025, the most thoughtful decisions are the ones that balance today’s constraints with tomorrow’s possibilities.
We believe that healthcare real estate should do more than offer care; it should help deliver it. That’s why our team at Davis is committed to helping our partners make leasing decisions that work for today and endure for what’s next.