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The Future of Medical Office Buildings in a Post-Pandemic World

The COVID-19 pandemic reshaped the healthcare landscape, forcing providers and patients alike to reconsider traditional care delivery models. As a result, the future of medical office buildings (MOBs) in the post-pandemic world is a topic of great interest for the commercial real estate industry in the Eastern Massachusetts region.

Why In-Person Healthcare Remains Essential

While the pandemic accelerated the adoption of telehealth and virtual care, it also highlighted the enduring need for in-person healthcare services. According to a report by JLL, medical office vacancy rates remained relatively stable throughout 2020, indicating the sector’s resilience amidst economic uncertainty.1 In fact, the demand for MOBs is expected to grow in the coming years, driven by several factors.

First, the aging population in the United States continues to drive demand for healthcare services. The U.S. Census Bureau projects that by 2030, all baby boomers will be 65 or older, representing a significant portion of the population.2 As this demographic ages, the need for accessible, convenient medical care will only increase, fueling demand for strategically located MOBs.

Second, the shift towards value-based care models is encouraging healthcare providers to establish a strong presence in the communities they serve. By locating MOBs closer to patients’ homes, providers can improve access to preventive care, manage chronic conditions more effectively and ultimately reduce healthcare costs. This trend aligns with the growing preference among patients for personalized, localized care experiences.3

Third, the pandemic has underscored the importance of infection control and patient safety in healthcare settings. MOBs offer a controlled environment that can be designed and operated to minimize the risk of infectious disease transmission. Features such as separate entrances, dedicated HVAC systems and touchless technologies can help instill confidence in patients and staff alike.4 As a result, MOBs are well-positioned to meet the evolving expectations of healthcare consumers in the post-pandemic era.

Adapting to Challenges

The future of MOBs, however, is not without challenges. The rapid adoption of telehealth during the pandemic has raised questions about the long-term demand for physical office space. While virtual care is likely to remain an integral part of the healthcare landscape, it is unlikely to completely replace in-person visits. Instead, MOBs may need to adapt to accommodate a hybrid care model, incorporating technology-enabled spaces for virtual consultations alongside traditional exam rooms.5

Additionally, the financial pressures facing healthcare providers in the wake of the pandemic may impact their ability to invest in new MOB developments or expansions. Commercial real estate brokers and consultants will need to work closely with healthcare clients to develop creative financing solutions and optimize existing assets to meet evolving needs.

Despite these challenges, the outlook for MOBs in the Eastern Massachusetts region remains positive. The area’s strong healthcare ecosystem, coupled with a growing and aging population, provides a solid foundation for continued demand. As healthcare providers adapt to the post-pandemic world, MOBs that offer flexible, technology-enabled spaces, prioritize patient safety and provide convenient access to care will be well-positioned for success.

For further information on this topic, please call us at 781.848.9400.

References:

BOMA International. (2020). The Impact of COVID-19 on Commercial Real Estate: Medical Office Buildings. https://www.boma.org/covidimpact-mob

  1. (2021). Healthcare Real Estate Outlook. https://www.us.jll.com/en/trends-and-insights/research/healthcare-real-estate-outlook
  2. S. Census Bureau. (2018). Older People Projected to Outnumber Children for First Time in U.S. History. https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html
  3. (2021). 2021 Global Health Care Outlook. https://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-health-care-sector-outlook.html
  4. BOMA International. (2020). The Impact of COVID-19 on Commercial Real Estate: Medical Office Buildings. https://www.boma.org/covidimpact-mob
  5. (2021). The Future of Office Space in a Post-COVID World. https://www.naiop.org/Research-and-Publications/Magazine/2021/Spring-2021/Business-Trends/The-Future-of-Office-Space-in-a-Post-COVID-World