Healthcare vital signs: Investors buying for income

What is true right now

This dataset reads like a thesis document, and the thesis is durability.

Cap rates stable, supply growth minimal, occupancy at cycle highs, institutional sellers supplying product. For an income buyer, that combination is close to ideal, and the discipline it rewards is underwriting to the real clearing price rather than the headline one.

Not every comp is your comp, and knowing that protects your basis.

REIT buyers paid an average of $566 per square foot over the past twelve months against a market-wide average of $386. In a market where private buyers set the clearing price, underwriting to institutional pricing is how discipline slips. Read the buyer type behind every comp before you rely on it.

The 257-basis-point spread is paying you for real work, not a free lunch.

The average healthcare cap rate of 7.05% in second quarter 2026 against a 4.70% 10-year Treasury is attractive, even as the spread has narrowed in recent years. Tenant credit, lease term and rollover are doing more of the work in returns than further cap rate compression will. That is not a warning; it is a map of where the diligence pays off.

Where the opportunity is

The most boring chart in commercial real estate is the best one you will see this year.

We’ve seen four consecutive quarters of healthcare cap rates holding in a narrow 6.98% to 7.07% band, landing at 7.05% in second quarter 2026. In a sector where most property types have spent three years repricing, medical office simply held. That is what durable income looks like on a chart, and boring is the entire point.

Supply growth of 1.1% is the moat around your rent roll.

New medical office is being added at roughly 1.1% of inventory per year while ambulatory employment grows faster than the space that houses it, with square feet per employee falling from about 193 to about 176. Scarcity is what underwrites renewal probability and pricing power, and it is not reversing quickly.

REITs sold $8.3B in the past year, and someone had to buy it.

Institutional-quality medical office assembled by public REITs is moving into private hands at a pace the sector has not seen. For a private buyer, this is a rare window to acquire professionally managed, well-leased product without bidding against the institutions that built the portfolios.

Where the yield and the growth actually sit.

East North Central offers the lowest rent basis in the country ($20.93/SF) with the fastest one-year rent growth (+3.9%). The Southeast pairs +3.8% one-year growth with the strongest absorption in the country (3.8MSF). For liquidity, Phoenix, Birmingham and Charlotte trade the highest share of inventory annually.

Learn more about Northmarq’s National Healthcare Group

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