This week, we’re taking a break from our usual briefing format to spotlight 10 key trends currently influencing the hospital real estate market. From pediatric hospital expansions to adaptive reuse projects, these developments are shaping strategies nationwide. If there’s a trend you’re seeing that’s not on our list, we’d love to hear from you. And as always, if our team can support your organization’s real estate needs, don’t hesitate to reach out.

  1. Children’s Hospitals – As we reported earlier this month, a number of major hospital systems have announced new free-standing children’s hospital projects. According to a new report, the pediatric hospital sector is expected to experience considerable growth over the next five years.
  2. Community Hospitals – A flurry of new community hospital projects have been announced in Indiana (West Lafayette), Tennessee (Clarksville) and South Carolina (Bluffton). A common theme involves hospital providers chasing markets with population growth. In several instances, two new hospital projects have been announced in the same market. For new hospital projects, providers are seeking between 50 acres to 150 acres.
  3. Rural Hospitals – Rural hospital and health care providers are bracing for significant Medicaid cuts included in the One Big Beautiful Bill Act (OBBBA). While the impact may not be felt for another year, we expect the effects of the OBBBA to force rural providers into affiliation discussions with larger hospitals and health systems.
  4. Urgent Care Centers – Hospital systems are rethinking urgent care centers. Some are taking a measured approach to opening new centers or closing underperforming centers, while others are going all-in. As we reported earlier this month, UPMC and GoHealth, through a joint venture, announced the opening of 81 urgent care centers.
  5. State Regulatory Approvals – Transacting with hospitals and health care facilities is becoming more challenging. In light of the effects of the Steward Health bankruptcy, a number of states have enacted legislation to regulate the sale of hospital and health care facilities, including the real estate associated with those facilities. We reported on this trend in April.
  6. Transaction Volume – Despite uncertainty created by legislative changes, we continue to see steady deal activity in the following areas: 1) ASCs; 2) specialty hospitals (behavioral and inpatient rehab); 3) MOBs; 4) senior housing; and 5) new hospital projects.
  7. Construction Costs – For build-to-suit projects, construction costs continue to take center stage. While tariff concerns have subsided, construction costs for new hospitals and health care facilities are incredibly high. We are working with a number of clients who are in the process of rightsizing projects in the design phase to reduce the cost of construction.
  8. Workforce Housing – As we reported earlier this month and in July, hospital systems continue to look for ways to develop affordable workforce housing close to their hospital campuses. Hospital leaders say that providing affordable housing near their campuses helps with employee recruiting and retention.
  9. Portfolio Optimization – Hospital systems are carefully reviewing their real estate portfolios. We are working with several clients to dispose of underperforming assets in non-core markets.
  10. Adaptive Reuse – Redeveloping old hospital campuses can be challenging. As we reported in July, we continue to see developers acquire and redevelop vacant hospitals into unique housing projects.

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Special thanks to Summer Associate Gabe Vaughn for his assistance in the preparation of this article.

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.

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