Healthcare REITs: 2026 Outlook

Where opportunity is emerging next

As 2025 draws to a close, healthcare real estate continues to stand out as one of the most resilient areas in the property market. Long-term demographic trends, stable tenant demand, and the essential nature of healthcare services have kept the sector on solid footing despite higher interest rates and slower deal activity. 

For investors who want exposure to this stability and growth without the operational challenges of owning and managing properties directly, healthcare real estate investment trusts (REITs) remain an attractive option. These investment trusts, like Terramed’s REIT, are designed to give investors access to real estate assets like surgical centers, veterinary facilities, and other consumer-driven healthcare properties, without the complexities of direct ownership. 

2025 in Review: A year of steady recovery

After several years of volatility, 2025 brought a sense of balance back to healthcare real estate. The year started with elevated borrowing costs, but by mid-year, more predictable interest rates encouraged REITs and institutional investors to re-enter the market.  

This steady recovery was reflected in Terramed’s momentum throughout 2025, as the company expanded its national footprint through the acquisition of several state-of-the-art veterinary and medical facilities. Today, Terramed’s portfolio encompasses more than 1.5 million square feet of healthcare real estate across 35 states, underscoring the continued investor confidence in specialized, mission-critical healthcare properties. 

The U.S. healthcare real estate market was valued at about $1.3 trillion in 2024 and is projected to reach $1.9 trillion by 2030, growing roughly 6 percent annually.¹ 

For investors, the message from 2025 is clear: the sector is resilient, tenant performance is solid, and capital is returning slowly but steadily. 

What to expect in 2026: five trends shaping the market

1. Outpatient facilities continue to lead growth 

Out-patient volumes are expected to rise by roughly 10.6 % over the next five years.² The migration from hospital campuses to outpatient settings continues to reshape the landscape. Health systems are consolidating inpatient services while expanding ambulatory networks in growing suburban markets. 

Healthcare REITs are following that trend closely. Expect to see continued acquisitions of medical office buildings, outpatient surgery centers, and specialized clinics.

2. Specialized healthcare niches gain institutional attention 

While traditional medical office buildings remain the backbone of healthcare real estate, 2025 made it clear that investors are seeking new ways to diversify within the sector.  

Within the broader outpatient and specialty sector, certain facility types are drawing increasing institutional interest due to their resilient demand and long-term leases. Facilities such as veterinary clinics, fertility centers, ophthalmology practices, and dental offices are seeing growing investment attention. 

Veterinary care, in particular, continues to outperform expectations as pet ownership and spending remain high post-pandemic. The U.S. veterinary hospital market is projected to have a compound annual growth rate of around 6.2 %.³

3. Adaptive reuse becomes an investment strategy 

High construction costs continue to slow new development, but REITs are finding creative ways to expand portfolios through adaptive reuse—converting underused office, retail, and hospitality buildings into healthcare spaces.

4. ESG and wellness move from optional to expected 

Sustainability and wellness have become strategic, not symbolic. Healthcare tenants increasingly prefer buildings that promote energy efficiency, patient comfort, and staff well-being. The global wellness real estate market reached $584 billion in 2024 and is projected to grow to $1.1 trillion by 2029.⁴ 

5. Regional Outlook: where opportunity is emerging 

Different regions present different dynamics: 

• Sunbelt Markets (Dallas, Phoenix, Tampa): Still strong, but pricing is tight. Growth remains healthy, though yields are moderating.⁵ 

• Emerging Secondary Markets (Raleigh, Salt Lake City, Kansas City, Columbus): Offer more balanced risk and better entry pricing for REITs expanding their geographic footprint.⁶ 

• Northeast and Midwest Redevelopment: Legacy healthcare campuses and aging infrastructure create redevelopment opportunities for REITs comfortable with repositioning assets.⁷ 

How investors can position themselves for 2026

1. Consider strategic locations 

Geography plays a critical role in long-term performance. Markets with aging populations, strong outpatient demand, or limited healthcare capacity tend to deliver more stable occupancy and predictable rent growth. A REIT that balances exposure between high-growth Sunbelt markets and emerging secondary or redeveloped Northeast and Midwest locations can optimize yield while diversifying risk. 

2. Evaluate capital discipline 

Strong balance sheets, transparent acquisition pipelines, and careful capital deployment are key indicators of sound management. Look for REITs that pursue selective acquisitions, redevelopment projects, and disciplined financing strategies. These actions protect dividends and support long-term portfolio stability. 

3. Prioritize tenant quality 

The health of a REIT’s operators directly affects portfolio performance. Outpatient facilities, physician networks, and specialty operators with strong track records and long-term leases provide stability, reduce vacancy risk, and support predictable cash flows. 

4. Factor in ESG and wellness design 

Sustainability initiatives, energy-efficient systems, and wellness-oriented design are increasingly important in healthcare real estate. REITs that integrate these elements protect long-term asset value, enhance tenant satisfaction, and contribute positively to patient and community outcomes. 

Conclusion: selectivity and partnership will define success

Healthcare real estate remains one of the most stable and strategically important corners of the market, supported by demographic trends and essential demand—and the 2026 outlook is promising. But the next phase of growth will belong to investors who are thoughtful about where and how they participate. 

Healthcare REITs provide a clear, efficient path to this opportunity, offering scale, diversification, and professional management in a sector with durable demand.

Sources 

1. GlobeNewswire. (2025, May 16). U.S. Healthcare Real Estate Market Report 2025–2030: Aging Baby Boomer Population to Represent 20% of U.S. Residents by 2030, Fueling Growth in Senior Living Communities. Retrieved from https://www.globenewswire.com/news-release/2025/05/16/3083136/28124/en/U-S-Healthcare-Real-Estate-Market-Report-2025-2030-Aging-Baby-Boomer-Population-to-Represent-20-of-U-S-Residents-by-2030-Fueling-Growth-in-Senior-Living-Communities.html 

2. Healthcare Facilities Today. (2025, February). Outpatient Growth and the Future of Healthcare Real Estate. Retrieved from https://www.healthcarefacilitiestoday.com/posts/Outpatient-Growth-and-the-Future-of-Healthcare-Real-Estate–30122 

3. Grand View Research. (2025). U.S. Veterinary Hospital Market Outlook. Retrieved from https://www.grandviewresearch.com/horizon/outlook/veterinary-hospital-market/united-states 

4. Global Wellness Institute. (2025, March). Build Well to Live Well 2025. Retrieved from https://globalwellnessinstitute.org/press-room/press-releases/build-well-to-live-well-2025/ 

5. Buxton. (2025). 2025 Healthcare Real Estate Outlook. Retrieved from https://7653748.fs1.hubspotusercontent-na1.net/hubfs/7653748/Reports/1024-106-2025%20Healthcare%20Real%20Estate%20Outlook%20v3.pdf 

6. Integra Realty Resources. (2025). Viewpoint 2025 Report. Retrieved from https://www.irr.com/news/just-released-viewpoint-2025-27779 

7. Hospital Facility Management Magazine. (2024, November). Breathing New Life into Outdated Health Care Real Estate. Retrieved from https://www.hfmmagazine.com/articles/2857-breathing-new-life-into-outdated-health-care-real-estate