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Bergen County
475 Medical Buildings
6,040,759 SF
RBA
$27.92 PSF
Base Rent |
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Essex County
297 Medical Buildings
3,942,687 SF
RBA
$25.01 PSF
Base Rent |
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Hudson County
196 Medical Buildings
3,713,321 SF RBA
$27.40 PSF Base Rent |
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Middlesex County
487 Medical Buildings
5,725,555 SF RBA
$20.78 PSF Base Rent |
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Northern NJ
3,242 Medical Buildings
42,243,618 SF RBA
$24.05 PSF Base Rent |
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SALES
40,785 SF | $17,855,760 1 Seymour Street, Montclair, NJ Buyer: Anchor Health Properties | BGO Seller: Ironstate Development Company
Seller: Brookfield Property Group
33,875 SF | $12,400,000 30 W Century Road, Paramus, NJ Buyer: Denis Real Estate Management Group Seller: Centrock Corporation |
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LEASES
8,000 SF 1135 Broad Street Clifton, NJ
7,645 SF 200 Washington Street Newark, NJ
4,000 SF 2780 Morris Avenue Union Township, NJ |
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Now that we’re halfway through 2025, we can see that the healthcare
landscape remains poised for transformative changes, largely influenced
by the presidential administration and congressional priorities. A central
theme driving these shifts is the urgent need for greater efficiency and
a growing emphasis on delivering comprehensive, whole-person care.
This dual focus hopes to optimize resource allocation and improve patient
outcomes by addressing the clinical and broader determinants of health.
A significant undertaking in this context is the restructuring of the U.S.
Department of Health and Human Services (HHS). According to a release
from the HHS, this initiative, aligned with the president’s DOGE executive
order, intends to streamline the department’s vast operations. The
restructuring plan envisions a substantial reduction in the workforce and
consolidating 28 HHS divisions into 15 more focused, new divisions.
This restructured HHS plans to refocus on preventing chronic illnesses
through better food, water and environmental health while maintaining
essential services like Medicare and Medicaid. The administrative burden
currently plagues the system and accounts for one-third of total healthcare
expenditures. Reimbursement models, which continue to shift toward
value-based care, are moving away from fee-for-service models. This
transition’s goal is to incentivize providers to deliver high-quality, cost-effective
care, leading to better patient outcomes rather than focusing
on the volume of services provided. This change, should it continue to
evolve, has the potential to profoundly impact how healthcare services are
provided and compensated. |
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By the Numbers
A new report, the 2025 Impact of Change Forecast, offers projected shifts
in various care delivery sites nationwide. - 18% growth in outpatient care volumes
- 5% growth in inpatient care patient discharges
- 8% growth in pediatric outpatient volumes
- 18% growth in cancer outpatient volumes (inpatient growth expected
to remain flat)
- 8% growth in inpatient discharges for type 2 diabetes thanks to GLP-1s
- 31% growth in post-acute care
The shift to virtual care also continues, with the report forecasting 13%
higher new patient and 7% established patient visits over the next decade.
Additionally, according to other analyses, health systems and corporate
medical groups are driving the shift toward more outpatient care.
Meanwhile, limited construction for purpose-built MOBs and rising
occupancy may result in the spread to adjacent property types. The
outpatient space is expected to achieve higher net operating income
(NOI) and experience consistent rent growth. The sunbelt markets
are expanding thanks to growing populations and contributions from
established brands, which remain steady. Investors considering MOBs
(as well as health systems) should see stability in the foreseeable future.
The outlook for 2025 remains “cautiously optimistic,” with investor
interest still high. However, tariffs could impact material costs and limit
new MOB development. The numbers aren’t available, yet, for H1 2025;
however, in 2024, vacancy rates for MOBs dropped 17 BP in Q4 2024,
marking the 17th consecutive quarterly decline since a Q1 2021 8.6%
peak. Triple-net rents reached an average high of $24.92 SF, a 2.7%
increase.
For the fourth consecutive year, MOB demand surpassed new supply.
In 2024, 18 MSF was absorbed, marking a 10% increase from the 16.6
MSF absorbed in 2023. The 14.3 MSF of new supply completed in
2024 couldn’t keep pace with demand. By the end of the year, 24.3
MSF was still under construction. But rising borrowing costs and high
labor and materials prices have led to a slowdown.
MOB investment continues to undergo a period of substantial expansion,
driven by healthcare providers’ increasing focus on outpatient services.
Data from Revista indicates that the absorption of medical outpatient
buildings accelerated significantly in Q4 2024. Across the top 100
markets, absorption reached 19 MSF, representing a 15% YOY increase.
According to Real Capital Analytics, MOB investments reached 14.4
billion — a 67.3% rebound compared to 2023 — but the total remained
below the $20.5 billion invested in 2022.
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Below are the Q2 statistics for New Jersey:
Northern NJ - 3,242 medical buildings
- 42,243,618 SF RBA
- $24.05 PSF base rent
Bergen County - 475 medical buildings
- 6,040,759 SF RBA
- $27.92 PSF base rent
Essex County - 297 medical buildings
- 3,942,687 SF RBA
- $25.01 PSF base rent
Middlesex County - 487 medical buildings
- 5,725,555 SF RBA
- $20.78 PSF base rent
Hudson County - 196 medical buildings
- 3,713,321 SF RBA
- $27.40 PSF base rent
What’s next?
Healthcare consumerism is expected to reach unprecedented levels. The increasing availability and sophistication of digital health platforms will
empower people to take a more active and informed role in managing their care. This shift will likely lead to greater demand for personalized health
solutions, convenient access to services, and transparent information about costs and quality.
2025 is also being heralded as the “year of whole-person care”— a concept that emphasizes a comprehensive approach to health extending
beyond treating specific diseases to addressing a patient’s physical, mental, and social well-being. We’ll see greater emphasis on preventive
services and a continued migration of care delivery to lower-cost settings, like outpatient clinics and home-based care.
The 2024 death of UnitedHealthcare’s CEO, Brian Thompson, underscores the importance of executive security and the impact of corporate
communications. In fact, the company’s shareholders sued over its reaction to the CEO’s killing. Communications professionals are urging
companies, especially those in often unpopular industries like the health insurance market, to prioritize concrete actions over performative
statements and advising these companies to be proactive with social listening. This tool will become even more important for helping companies
anticipate potential issues and strategically manage public perception in an increasingly scrutinized environment.
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Teterboro, NJ | 201 488 5800 Parsippany, NJ | 973 463 1011 |
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