Long-Term Demand Drivers
Aging Population Driving Healthcare Utilization
The United States is experiencing significant demographic aging as medical advancements allow people to live longer, healthier lives. Between 2016 and 2026, the population over age 65 is projected to increase by more than 37%, representing over 19% of the total U.S. population as the baby boomer generation enters retirement.
Individuals over 65 spend substantially more on healthcare than any other age group — averaging over $5,800 annually compared to less than $1,600 for individuals under 30 according to 2014 Consumer Expenditure Survey. As this population grows, demand for chronic and acute care management is expected to increase, much of which is shifting toward lower-cost outpatient settings such as medical office buildings and behavioral health facilities.
Millennials Entering Peak Healthcare Years
The large millennial generation is now entering their thirties and beginning to form families. As household formation increases, healthcare expenditures for this demographic are expected to rise significantly.
Millennials are also more likely to seek convenient, accessible outpatient care, including medication-assisted treatment clinics, detox and recovery centers, and other behavioral health services — further supporting demand for specialized outpatient real estate.
Expansion of the Insured Population
Since 1999, the number of insured individuals in the United States has increased by more than 20%, driven by population growth and policy initiatives such as the Patient Protection and Affordable Care Act.
While healthcare policy may evolve across administrations, expanding access to affordable insurance remains a central priority. A larger insured population directly supports sustained demand for healthcare facilities.
Structural Shift to Outpatient Care
Technological advancements and cost-containment pressures are accelerating the migration of healthcare delivery from hospitals to more efficient outpatient environments.
Hospitals and health systems are reevaluating their operating models to improve efficiency, driving procedures and services historically performed in hospitals into medical office buildings and behavioral health centers. At the same time, provider consolidation and expanded roles for nurses, physician assistants, and allied health professionals are contributing to healthcare becoming one of the fastest-growing employment sectors in the U.S.
Behavioral Health: A Strategic Inflection Point
The behavioral health real estate sector is undergoing a strategic pivot. Since the onset of COVID-19, shifts in human behavior — including social isolation, unemployment volatility, and economic uncertainty — have contributed to increased rates of anxiety, depression, and substance abuse.
These factors, alongside evolving healthcare policy, have driven heightened demand for psychiatric centers and behavioral health services nationwide.
Market Dislocation Creating Opportunity
Simultaneously, broader commercial real estate values have declined, with cap rates and net asset values widening across sectors.
This dislocation has created a compelling investment environment within a well-financed, high-growth healthcare segment that remains underpenetrated by traditional real estate investors.