- While institutional investor groups are a major acquirer of medical outpatient buildings (MOBs), the past 18 months have seen a surge in “reverse monetizations” where hospitals and health systems are buying (or buying back) such buildings. Hospitals purchased $2.8B worth of MOBs in 2024 and $761M in 1H 2025, accounting for about 23 percent of all MOB purchases.
- Hospitals are responding to upcoming reimbursement cuts by selling off ancillary businesses and non-core real estate, while pursuing joint ventures in specialty areas like long-term care, home health and lab services. These divestitures aim to boost cash reserves, streamline operations and help health systems manage financial pressures from federal funding reductions and higher uncompensated care costs.
- So far in 2025, at least 11 health systems have announced hospital projects valued at $1B or more, with three of the largest located in California. The projects range from new pediatric and cancer hospitals to major campus expansions, reflecting both a spread of geographic reach and reinvestment in existing facilities.
- Tampa General Hospital is partnering with The Michaels Organization to build 170 workforce housing units in Brandon, FL. The units will be set at below-market-rate with shuttle services to the hospital and are aimed at helping recruit and retain staff.
- Hall Render recently released an article on non-traditional avenues for independent and smaller hospitals to maintain financial viability in the wake of the One Big Beautiful Bill Act’s Medicaid cuts. Strategies include (i) contracting with third-party experts to outsource and gain operational efficiencies; (ii) maintaining strong physician relationships; and (iii) combining forces with similarly situated providers through joint governance, joint operating or affiliation arrangements.
- California’s Department of Health Care Services rescinded a $50M grant for Palomar Health’s planned 120-bed psychiatric hospital in Escondido, CA, after the system failed to provide required matching fund documentation. This rescission leaves the future of the project uncertain despite its groundbreaking in September 2024.
- Regional One Health’s plan to build a new Memphis, TN replacement hospital campus has grown from an estimated $1B to nearly $2B, sparking local debate on whether to proceed with the replacement hospital campus or to take steps to renovate existing facilities. Earlier reports indicated labor and material cost increases are behind the increase.
- Corewell Health and Quest Diagnostics have entered a definitive agreement to form a joint venture to build a new 100,000-sf state-of-the-art laboratory in Southfield, MI. Quest will manage Corewell Health’s 21 hospital labs across the state, owning 51% of the joint venture, with the new facility expected to open in early 2027.
- Kaufman Hall released its latest hospital flash report based on July 2025 data. The data show a steady decrease in median hospital operating margins since January 2025. While patient volumes and revenues are trending up, non-labor expense growth continues to outpace revenue growth.
- A recent article featured the ways Baylor Scott & White Health is expanding its footprint without building new hospitals. The hospital cited its “customer-centered strategy” as a driver for opening four new freestanding EDs and six new urgent care locations in North Texas, adding to its 52 hospitals and 1,300 care sites statewide.
For more information, please contact:
- Andrew Dick at adick@hallrender.com or (317) 977-1491;
- Joel Swider at jswider@hallrender.com or (317) 429-3638; or
- Your primary Hall Render contact.
Special thanks to Summer Associate Gabe Vaughn for his assistance with the preparation of this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
