Over the past decade, medical office has emerged as one of the most sought-after asset classes in commercial real estate. Driven by the rise of e-commerce and reinforced by the resilience of healthcare during COVID-19, investor demand has accelerated. Yet medical office is not a uniform product. Understanding basis, market functionality, and future flexibility is critical to avoiding hidden risk and preserving long-term value.

October marked a clear acceleration in medical office transaction activity across Texas. Sellers are adjusting to market realities, with average asking prices per square foot declining and average asking cap rates rising slightly—both contributing to a narrowing of the bid-ask spread. While the Federal Reserve reduced rates by 25 basis points, long-term Treasury yields—more directly tied to borrowing costs and cap rates—have remained relatively stable. Even so, investor senti

Across the U.S., healthcare delivery is undergoing a structural shift. Hospitals and health systems are moving more procedures and patient interactions out of acute-care campuses and into decentralized, outpatient, and even at-home models. This evolution—driven by cost efficiency, patient preference, and technology—is reshaping how and where care is delivered, and by extension, how medical real estate is valued and deployed. A recent Becker’s ASC report found that roughly 60%