Medical outpatient buildings (MOBs) represent a $500 billion asset class in the US, one that has demonstrated remarkable stability, maintaining occupancy rates between 91-92% over the past 14 years according to Revista’s industry data covering 150 million square feet, and 86.1% tenant retention rate in 2025. These strong fundamentals reflect the unique characteristics of healthcare real estate that differentiate it from conventional office properties. The question for investors is whether their management approach accounts for the specialized requirements that drive these performance metrics. If not, you could be putting your asset, and returns, at risk. In the competitive landscape of healthcare commercial real estate, the difference between a thriving medical building and an underperforming asset often comes down to one critical factor: the strength of your marketing, leasing, and property management team.
As healthcare delivery continues to evolve toward outpatient care models, the role of these specialized professionals has become more vital than ever in ensuring tenant satisfaction, optimizing patient experiences, and maximizing asset value for investors.
Understanding the Healthcare Real Estate Ecosystem
Outpatient medical buildings represent a unique segment of commercial real estate, where traditional property management principles intersect with the specialized needs of healthcare providers and their patients.
Unlike conventional office buildings, medical buildings require teams that understand HIPAA compliance, infection control protocols, specialized infrastructure needs, and the critical importance of operational continuity in healthcare delivery.
The Davis Development, Investment, Brokerage and Property Management teams collaborated to deliver this expansive 3-story MOB in Maplewood, MN. Through the successful execution of this project, HealthEast was able to consolidate various ambulatory clinics into one state-of-the-art medical hub that improved patient satisfaction and organizational efficiencies. Davis quickly completed the lease up to deliver a fully-leased investment asset to its investor partners.
The Marketing and Leasing Advantage
Medical buildings function as healthcare ecosystems where the built environment, tenant mix, and services directly impact individual practice success—a dynamic that makes strategic leasing far more consequential than in traditional commercial real estate. The importance of maintaining full occupancy extends beyond typical landlord concerns about rental income: partially occupied medical buildings create operational challenges that hurt both property performance and tenant success.
For landlords, vacant medical space is particularly costly. Empty suites in medical buildings often require specialized tenant improvements and longer lease-up periods than conventional office space, while partially occupied buildings struggle to achieve the patient volumes that make remaining tenants financially viable.
For tenants, building occupancy levels directly affect practice viability. Medical professionals depend on cross-referrals, shared patient populations, and the convenience factor that draws patients to comprehensive care locations. A half-empty medical building signals market problems to both patients and referring physicians, potentially damaging the reputation and patient flow of remaining tenants. Conversely, fully occupied buildings with complementary practices create environments where patients can access multiple services in one location, benefiting all tenants.
Market Intelligence and Positioning
Healthcare-focused leasing professionals maintain relationships with hospital systems, physician groups, and emerging healthcare delivery models that general commercial brokers typically lack. They understand market dynamics like which specialties face reimbursement pressures, which are expanding, and how regulatory changes affect space requirements. This intelligence enables proactive tenant recruitment and lease structuring that anticipates rather than reacts to market shifts.
The financial impact is reflected in industry fundamentals: medical buildings maintain 91.3% occupancy rates while achieving NOI margins of 66.2%—performance that depends heavily on achieving and maintaining the full occupancy that creates value for both landlords and tenants.
Property Management Excellence in Healthcare Settings
Medical buildings require property management teams that understand healthcare-specific challenges: HIPAA compliance, infection control protocols, specialized infrastructure, and the critical importance of uninterrupted operations for patient care and safety.
Healthcare providers cannot afford operational disruptions. A malfunctioning HVAC system or power outage in a medical building can directly impact patient care. Specialized property management teams implement proactive maintenance programs, maintain relationships with healthcare-certified contractors, and ensure 24/7 responsiveness to critical issues while staying current with healthcare facility regulations, ADA compliance, and infection control standards.
Property management teams that understand healthcare create environments that support both patient experience and tenant operations through effective wayfinding, comfortable common areas, adequate parking, and seamless facility operations.
Long-Term Partnership Benefits
Integrated Team Coordination
The complexity of healthcare real estate requires seamless coordination between leasing and property management teams that goes beyond traditional commercial real estate operations. Unlike conventional office buildings where these functions operate relatively independently, medical buildings demand integrated strategies where leasing decisions directly impact operational requirements and vice versa.
For example, when leasing to a new radiology practice, the property management team must coordinate specialized infrastructure upgrades (lead-lined walls, enhanced electrical systems, reinforced flooring to handle the load, etc) while the leasing team structures tenant improvement allowances and lease terms and language that account for these unique requirements. Similarly, property managers must understand tenant lease terms to anticipate infrastructure needs – a departing surgical center requires different decommissioning and re-leasing preparation than a departing general practitioner, affecting both timeline and capital requirements.
Communication and Market Intelligence Sharing
Property management teams often serve as early warning systems for leasing challenges, identifying tenant financial distress, space utilization changes, or expansion needs before they become formal leasing decisions. Conversely, leasing teams provide market intelligence about emerging healthcare delivery trends, regulatory changes, and competitive dynamics that inform property management’s capital planning and operational strategies.
Tenant Retention and Expansion
Healthcare providers invest significantly in establishing their practices within a building. A responsive, knowledgeable property management team becomes a valued partner in their success, leading to higher tenant retention rates and expansion opportunities within the property.
Conclusion
In healthcare real estate, success is measured not just in financial returns but in the ability to support quality healthcare delivery within the communities we serve. The specialized expertise of dedicated marketing, leasing, and property management teams creates a foundation for this success, driving tenant satisfaction, enhancing patient experiences, and ultimately maximizing asset value for investors.
As the healthcare industry continues its shift toward outpatient care models and value-based delivery systems, the importance of these specialized real estate services will only continue to grow. Investors who recognize this reality and partner with experienced healthcare real estate professionals position themselves for sustained success in this dynamic and essential market sector.
The investment in expert marketing, leasing, and property management isn’t just a cost of doing business, it’s a strategic advantage that creates lasting value for all stakeholders in the healthcare real estate ecosystem.