Medical outpatient buildings are booming—even as D.C.’s office market is in flux

While the broader Washington, DC office market continues to face headwinds—from remote work to high vacancies and economic uncertainty—one segment is bucking the trend in a big way: medical outpatient buildings (MOBs). Over the past three quarters, the DC-Maryland-Virginia (DMV) region has seen a record-breaking wave of MOB sales, making it among the most active markets in the country for this asset class in 2025. It’s a surprising twist, but one that makes a lot of sense when you dig into the details.

A tale of two markets

Traditional office space in DC is in flux. Companies are rethinking their footprints, and vacancies are climbing. But MOBs? They’re thriving. Investors are increasingly drawn to healthcare real estate for its reliability, long-term demand, and ability to weather economic ups and downs. Sellers are responding, and the market is moving – fast.

In fact, the DMV logged $437 million in MOB sales over the past four quarters ending in Q2 2025. That’s not just a local high, it’s the highest volume ever recorded in the region.

Why MOBs are having a moment

Total returns from Healthcare REITs have outperformed all other sector categories over the past 12 months according to NAREIT and nationally MOB investment is rebounding. In a period of economic turbulence for commercial real estate, the underlying strength of MOB investment stands out.

Here’s what’s driving the surge:

Aging Population: By 2030, one in five Americans will be over 65. That group accounts for a big chunk of healthcare spending, and demand for outpatient care is rising fast.
Care Is Moving Out: Health systems are shifting services away from hospitals and into community-based outpatient centers. It’s more convenient for patients and more efficient for providers.
Skyrocketing Development Costs: The average MOB delivered in Q2 2025 exceeded $550 psf with many buildings exceeding $900 psf. Combined with financing constraints, there is a slowdown of new construction. New building starts as a percentage of inventory are at their lowest point in 15 years, pushing occupancy for MOBs to 92.9%.
Investor Appeal: MOBs offer steady rent growth, up 11% since 2022, strong occupancy, and dependable income. In today’s unpredictable real estate landscape, that’s a winning combo.
Favorable Financing: Lenders are on board, offering better terms and more availability for healthcare real estate deals.

Why DC?

It might not be the first place that comes to mind for healthcare real estate, but the DMV has some serious advantages. Compared to the Southeast’s “hot” markets, the DC region actually checks more of the boxes investors are looking for, especially when it comes to demographics and healthcare infrastructure.

The area is home to top-tier health systems like Johns Hopkins Medicine and Inova Health, adding another layer of stability and credibility to the market

The word is out

With strong fundamentals, premium pricing, and record-setting sales, the DMV’s MOB sector isn’t just holding steady—it’s leading the pack.

For investors, developers, and healthcare providers, this region offers a unique opportunity to be part of the future of outpatient care. And from where we stand, that future looks bright.

Reach out to our experts to learn more about how to make the most of this opportunity.

Jim Kornick

- Principal, Co-Leader US Healthcare Capital Markets
- Capital Markets Group
- Healthcare

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