20 — May 2025 — Healthcare — M id A tlantic Real Estate Journal
www.marej.com
H ealthcare By Team Lizzack-Horning of NAI James E. Hanson
The evolving landscape of healthcare office space: Key trends and strategic takeaways
T
he healthcare real es- tate market is under- going a transformative
convenient, cost-effective, and closer to residential ar- eas, aligning with the needs
growth. Notably, personal care services—driven by an ag- ing population and expanded government support—are ex- pected to grow at a CAGR of 10–12%, underscoring a broader trend toward home- based and post-acute care. In conclusion, the health- care real estate market is being reshaped by a decisive shift toward outpatient care, constrained supply of new MOBs, and data-informed real estate strategies. Health sys- tems and investors alike are capitalizing on these changes by focusing on strategic site selection, ownership oppor- tunities, and integrated ser- vice delivery models. As the demand for accessible, cost- efficient care continues to rise, healthcare real estate will remain a critical component of industry’s evolution. Team Lizzack-Horning of NAI James E. Hanson is an expert brokerage team specializing in healthcare, of- fice, and investment property transactions. MAREJ
shift driven by popula- tion changes, technologi- cal advance- ments, and evolving pa- tient prefer- ences. These factors are significantly
of an aging population and the rise in chronic conditions. According to the Advi- sory Board, outpatient volumes are projected to
existing inventory in Q4 2024, and 92% of those projects were preleased, limiting availability for tenants seeking new space. Consequently, developers are turning to conversions and renovations, which now repre- sent 59% and 32% of projects respectively, albeit only 13% of total square footage. Healthcare providers and systems are increasingly adopting a strategic, data- driven approach to site selec- tion. Factors such as local demographics, insurance mix, referral patterns, and competi- tor positioning now influence real estate decisions. Orga- nizations are also pursuing ownership opportunities, with medical office condo sales up 13% year-over-year and 24% of purchases made by users
rather than investors. Owner- ship provides greater control over space and long-term cost predictability, which is especially appealing in a tight leasing market. From an investment stand- point, healthcare real estate remains resilient. Although year-over-year rent growth for MOBs slowed slightly to 2.5% in 2024 from 3.7% in 2023, rent levels continue to climb, especially in top-tier markets. Premium assets are outper- forming mid- and low-tier properties, with a compound annual growth rate of 2.4% from 2019 to 2024. Looking ahead, McKinsey forecasts strong EBITDA growth across healthcare sec- tors through 2028, with most segments exceeding 5% annual
Darren Lizzack, MSRE
Randy Horning, SIOR, MSRE
influencing the demand for healthcare office space, par - ticularly in the outpatient and medical office building (MOB) sectors. As healthcare delivery continues to pivot away from traditional hospital settings, both health systems and in- vestors are adjusting their strategies to capitalize on this dynamic environment. One of the most significant developments is the surge in outpatient care. Patient preferences are moving deci- sively toward more accessible, retail-like outpatient settings. These facilities are often more
grow by 10.6% over the next five years, fueled by demo- graphic trends and the in- creasing adoption of minimally invasive procedures. This shift is also reflected in the market performance of MOBs. In Q4 2024, MOB absorption hit 19 million s/f, a 15% increase from the previ- ous year, and occupancy rates rose to 92.8%. Despite strong demand, new MOB construc- tion remains constrained due to high costs, inflation-related challenges, and a cautious in- vestment climate. New starts accounted for only 0.8% of
Team Lizzack-Horning of NAI James E. Hanson helps mental health agency secure new 5,000 s/f office lease in Wayne, NJ
$98M in value. The team’s in - novative end-to-end platform, augmented by CREA United, an expansive network of real estate service providers Lizzack and Horning co-founded, helps clients navigate the increasingly complex transaction process. About NAI James E. Hanson Since 1955, NAI James E. Hanson has been a leading independent full-service com- mercial real estate brokerage and property management firm. Serving a diverse client list, the company offers strategic solu- tions in office, industrial, and retail brokerage, investment sales, land sales, management, government services, and fi- nancing expertise. As one of the original mem- bers of NAI Global, an interna- tional commercial real estate network with over 325 offices worldwide, NAI James E. Han- son continues to build on its legacy of excellence. In 2025, the firm expanded its capabilities with the acqui- sition of The Garibaldi Group and NAI Summit, creating one of the region’s most experienced commercial real estate services platforms. MAREJ
WAYNE, NJ — NAI James E. Hanson , the largest New Jersey-based full-service inde- pendent commercial real estate firm, has negotiated a 5,000 s/f office lease at 30 Galesi Dr. in Wayne. NAI James E. Han- son’s Team Lizzack-Horning, comprised of Darren Lizzack, MSRE and Randy Horning, SIOR, MSRE , represented the tenant, Center for Evaluation and Counseling, Inc. (CEC), in the transaction. CEC is a nonprofit mental health agency with over 30 years of experience treating children, adolescents, adults and families across northern New Jersey. The agency offers a wide range of trauma-informed services, including individual, group, and family therapy; fo- rensic evaluations; parenting support; and specialized pro- grams for at-risk youth. With of- fices in Sparta, Parsippany and Madison, CEC’s new office at 30 Galesi Dri. further expands its northern NJ footprint. 30 Galesi Dr. is a three-story, 46,000 s/f multi-tenant office building strategically located near Rtes. 23 and 46 and I-80 in Wayne. The building boasts
30 Galesi Dr. in Wayne, PA
a newly renovated lobby, ample on-site parking, high ceilings, an on-site property manager, and more. “Specialized healthcare pro- viders like the Center for Evalu- ation and Counseling continue to serve as one of the primary
demand drivers for class A sub- urban office space,” said Horn - ing. “Well-maintained proper- ties situated in a prime location like 30 Galesi Dr. continue to be highly attractive destinations for these kinds of tenants.” Established in 2014, Team
Lizzack-Horning is an expert brokerage team that special- izes in healthcare, office, and investment property transac- tions. Over the last 30 months, the team has successfully closed 81 real estate sales and leasing transactions totaling more than
Made with FlippingBook. PDF to flipbook with ease