5 Reasons U.S. Health Care Real Estate Is Likely to See Values Soar This Year
As investors scan the horizon for resilient sectors with sustainable growth, U.S. health care real estate stands out. Demographic tailwinds, constrained supply, and macroeconomic shifts are aligning to create a rare confluence of demand drivers that could propel values higher throughout 2026. Below are five compelling reasons institutional and private capital alike are turning toward this asset class.
1. Demographic Force: Aging Population and Rising Demand
The most fundamental driver of health care real estate is demand, and demand is being fueled by America’s aging population. The U.S. population aged 75 and older is expanding by more than 1 million people annually, a pace roughly three times faster than the last four decades — with direct implications for outpatient facilities, senior living communities, and specialized care centers according to CBRE.
This demographic shift increases utilization of medical services and supports long-term occupancy fundamentals for medical office buildings (MOBs), outpatient centers, and senior housing — all critical real estate niches.
2. Limited New Supply and Rising Occupancy
Supply constraints are a powerful valuation catalyst. MOB construction completions are projected to fall to decade-low levels in 2026, reducing the availability of new medical space even as demand grows, also according to data from CBRE.
With fewer new deliveries and historically tight vacancy rates, existing facilities are positioned to command higher rents and maintain high occupancy — a classic supply-and-demand setup that supports rising asset values.
3. Low Interest Rates Bolster the Broader Economy
Although commercial real estate faced headwinds in recent years from elevated borrowing costs, prospects have brightened as interest rate pressures ease. Recent narratives from the investment community and Barron’s highlight anticipated rate cuts and improved financing conditions as supportive for real estate valuations generally.
Lower rates reduce borrowing costs for buyers and developers while boosting broader economic confidence. For health care real estate — characterized by long lease terms and stable income — this translates into better cap rate compression potential and healthier transaction activity.
4. Geopolitical Uncertainty Redirects Global Capital Toward the U.S.
International political instability — from economic stress in key foreign markets to ongoing geopolitical tensions — has increasingly made U.S. real estate a preferred destination for international capital seeking stability and legal certainty.
Although precise capital flow statistics vary by investor type, the broader trend is clear: global capital is favoring stable developed markets, especially the U.S., as a hedge against overseas risk. In commercial markets this can translate into increased liquidity and higher bid activity, particularly in defensive sectors like health care.
5. Housing Affordability Constraints Push Investors Toward Alternatives
A persistent lack of affordable housing in the U.S. has pushed up residential values and squeezed investors seeking yield in multifamily rentals. With affordability challenges keeping many would-be buyers sidelined, investors are reallocating capital into sectors with solid risk-adjusted returns — notably health care real estate. AP News reports that national home prices have remained elevated amid constrained supply, driving rents higher across many markets and underscoring broader housing tightness.
Health care real estate, with its inelastic demand and recession-resistant characteristics, offers an attractive diversification away from traditional residential and office markets.
In conclusion, robust demographic demand, constrained supply, a more supportive financing backdrop, international capital inflows, and the ripple effects of housing market constraints create a compelling case for strong performance in U.S. health care real estate throughout 2026. Investors seeking long-duration cash flow and value appreciation should consider this sector’s unique positioning in today’s complex economic landscape.
