H1 2025 U.S. healthcare market overview

U.S. hospital and health system margins remained steady at 1.1% in May, supported by modest gains in mid-sized hospitals, even as rising labor costs and increased physician investment continue to challenge capacity for real estate expansion. Despite a more than 20% decline in medical office building (MOB) sales prices driven by high interest rates, rental rates and occupancy have remained robust—underscoring sustained demand from medical users. Healthcare job postings have surged 37.5% since May 2023 and 137% since 2020, reflecting persistent staffing pressures in an increasingly competitive labor market. Investor dynamics in the MOB sector are shifting in 2025, with private owners capturing the majority of acquisitions while REIT participation has dropped, highlighting a strategic focus on tenant credit, lease terms, and property class over traditional market geography.

1.1%

U.S. health systems’ operating margins see modest increase

Hospital and health system operating margins remained steady in May, with health systems posting a median year-to-date (YTD) margin of 1.1%, up from 0.9% in March. During the same period, physician investment rose 19.2% year over year to $332,512, while expenses outpaced revenue growth, pressuring health systems' capacity for real estate expansion.

-20.2%

change in medical office building (MOB) pricing

High interest rates have led to decreased MOB deal pricing as owners of core and core plus assets with strong tenants and long leases hold for lower cap rates. At the same time, strong medical user demand has sustained over five years of consistent quarterly rent growth.

37.5%

increase in healthcare job postings

From May 2023 to May 2025, healthcare job postings surged 37.5% as providers seek more staff than in previous years. Over the longer term, postings jumped 137% from May 2020 to May 2025, though growth is expected to level off as the labor supply expands and competition for medical roles increases.

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