M id A tlantic Real Estate Journal — Healthcare — May 2026 — 7
www.marej.com
H ealthcare
ealthcare delivery has consolidated over the past decade. Owner- By Erica Davidson and Adam Tannenbaum, Lee & Associates NJ | WBE New Jersey Isn’t Building Medical Office Like the Sun Belt. That’s The Advantage for Investors. H
often benefit from adjacency to complementary providers, procedural infrastructure, and network effects. The dis-
5.0 spaces per 1,000 square feet materially expand the universe of viable users, par- ticularly for specialties with higher procedural acuity and patient throughput. Struc- tural considerations such as slab-on-grade construction, efficient floorplates, floor load capacity, ground-floor acces - sibility, and lie-flat gurney-ca - pable elevators can further in- fluence a property’s long-term competitiveness. The ability to accommodate backup genera- tors, medical gas, wall oxygen, imaging infrastructure, and other technical requirements
may ultimately determine whether an asset can sup- port the next generation of outpatient delivery or simply continue as well-located office space suited for lower-acuity satellite uses. For investors and operators, the opportunity in New Jersey outpatient healthcare real es- tate is shaped less by explosive new development and more by scarcity, fragmentation, and replacement difficulty. Much of the state’s outpatient in- ventory remains controlled by physician ownership groups, local investors, and family
offices despite increasingly institutional-quality tenancy and growing infrastructure demands from specialty users. In a state defined by dense population centers, difficult entitlement processes, limited viable development sites, and a heavily regulated ambula- tory care environment, well- located and medically func- tional assets can be difficult to replace. That dynamic contin- ues to create opportunity both for stabilized assets already embedded within established healthcare ecosystems and continued on page 10
ship of the underlying medical office real estate has not. In New Jersey, many outpa- tient medical properties are still con-
tinction be- tween gener- ic medical office space and strate- gically rel- evant outpa-
Erica Davidson
Adam Tannenbaum
trolled by physician owner- ship groups, local investors, and family offices even as the providers occupying them increasingly operate within large health systems, private equity-backed specialty plat- forms, and managed service organizations. The result is a market where institutional- quality healthcare tenancy often exists within assets that remain locally owned and not fully aligned with modern out- patient delivery requirements. Unlike many Sun Belt markets where expansion is driven by large-scale new development and the rapid proliferation of ambulatory surgical centers, New Jer- sey’s healthcare landscape is shaped by population density, high replacement costs, dif- ficult entitlement processes, and established referral net- works where health systems compete aggressively for mar- ket share. More procedures are moving out of hospitals and into outpatient settings. This shift is taking place in a market where new medically functional supply remains dif- ficult to deliver at scale. Medical office real estate is increasingly organized around major healthcare submar- kets tied to dominant hos- pital systems and specialty referral networks. Histori- cally, many health systems operated within relatively defined geographic strongholds including Hackensack Merid- ian and Valley Health along Route 17 in Bergen County, Atlantic Health around Mor- ristown, and RWJBarnabas in areas such as Livingston and New Brunswick. The most competitive submarkets are increasingly shaped not just by hospital-owned practices, but by specialty operators seek- ing proximity to established referral ecosystems and pa- tient populations. Orthopedics, gastroenterology, imaging, car- diology, women’s health, and other higher-acuity specialties
tient real estate often comes down to a handful of physical requirements. In most sub- urban areas throughout the state, parking ratios above
N o . 1 Privately Held CRE Brokerage Firm in the US
Lee & Associates New Jersey Local Expertise International Reach World Class
Lease Administration
Structured Finance
Brokerage Services
Property & Asset Management
Special Asset Advisory
1,750 PROFESSIONALS AND GROWING INTERNATIONALLY
$2+ BILLION IN BROKERED SALE & LEASE SF OVER 5 YEARS
$120+ BILLION TRANSACTION VOLUME OVER 5 YEARS
611 River Drive, 4th Floor I Elmwood Park, NJ 07407 110 South Jefferson Road, Suite 203 I Whippany, NJ 07981 110 Fieldcrest Avenue, Suite 5 I Edison, NJ 08817 973.337.1144 I lee-associates.com/newjersey
Made with FlippingBook Digital Proposal Creator