Medical Office Investment in Boston
Boston's medical office market sits at 5.2%-6.8% cap rates right now. The play here is simple - you've got world-class health systems anchoring buildings, aging demographics driving patient volume, and the ongoing shift from inpatient to outpatient care. But don't get cute with single-tenant buildings tied to independent docs. The consolidation wave means health system tenants or bust. Your buyers want to see Partners HealthCare, Beth Israel, or Tufts affiliations on the rent rolls.
Market Context
Cap Rate Range
5.2%-6.8% depending on tenant credit and WALT
Current Vacancy
8.3% across metro, with newer Class A properties at 4-5%
Rent Trend
Up 3.2% annually for quality space, flat for older buildings needing TI
Absorption
1.2M SF absorbed in trailing 12 months, mostly specialist practices
Price Per Unit Trend
$285-$420 per SF for recent trades, premium for ASC-capable buildings
Transaction Volume
$680M in medical office sales in 2025, down from $920M in 2024
Submarket Analysis
Longwood Medical Area
5.2%-5.8% capVacancy
3.1%
Avg Rent (1BR)
$42-48 PSF NNN
Strong - proximity to major hospitals drives demand
OM Tip
Highlight walkability to Brigham, Dana-Farber. Include shuttle access details.
Burlington/Woburn Corridor
6.0%-6.5% capVacancy
7.8%
Avg Rent (1BR)
$28-35 PSF NNN
Solid suburban play with parking and highway access
OM Tip
Emphasize 495 accessibility. Show patient drive time maps.
Newton/Wellesley
5.8%-6.2% capVacancy
5.2%
Avg Rent (1BR)
$38-44 PSF NNN
Affluent patient base, limited new supply
OM Tip
Demographics matter here - include household income data within 5-mile radius.
Cambridge/Somerville
5.5%-6.0% capVacancy
6.4%
Avg Rent (1BR)
$36-42 PSF NNN
Tight market with biotech spillover demand
OM Tip
Call out any lab conversion potential. Mention ceiling heights and HVAC capacity.
South Shore (Quincy/Braintree)
6.2%-6.8% capVacancy
9.1%
Avg Rent (1BR)
$24-32 PSF NNN
Value play but watch tenant credit
OM Tip
Focus on health system affiliations. Independent practices are risky here.
Performance by Vintage
0
P
1
r
2
e
3
-
4
1
5
9
6
9
7
0
8
s
9
10
b
11
u
12
i
13
l
14
d
15
i
16
n
17
g
18
s
19
20
t
21
r
22
a
23
d
24
e
25
26
a
27
t
28
29
$
30
2
31
2
32
0
33
-
34
2
35
8
36
0
37
38
P
39
S
40
F
41
42
b
43
u
44
t
45
46
n
47
e
48
e
49
d
50
51
$
52
5
53
0
54
-
55
8
56
0
57
58
P
59
S
60
F
61
62
i
63
n
64
65
u
66
p
67
g
68
r
69
a
70
d
71
e
72
s
73
74
f
75
o
76
r
77
78
m
79
o
80
d
81
e
82
r
83
n
84
85
m
86
e
87
d
88
i
89
c
90
a
91
l
92
93
u
94
s
95
e
96
.
97
98
M
99
e
100
d
101
i
102
c
103
a
104
l
105
106
g
107
a
108
s
109
,
110
111
i
112
m
113
a
114
g
115
i
116
n
117
g
118
-
119
r
120
a
121
t
122
e
123
d
124
125
e
126
l
127
e
128
c
129
t
130
r
131
i
132
c
133
a
134
l
135
,
136
137
a
138
n
139
d
140
141
A
142
D
143
A
144
145
c
146
o
147
m
148
p
149
l
150
i
151
a
152
n
153
c
154
e
155
156
e
157
a
158
t
159
160
i
161
n
162
t
163
o
164
165
r
166
e
167
t
168
u
169
r
170
n
171
s
172
.
173
174
1
175
9
176
9
177
0
178
s
179
-
180
2
181
0
182
0
183
0
184
s
185
186
v
187
i
188
n
189
t
190
a
191
g
192
e
193
194
h
195
i
196
t
197
s
198
199
t
200
h
201
e
202
203
s
204
w
205
e
206
e
207
t
208
209
s
210
p
211
o
212
t
213
214
-
215
216
a
217
l
218
r
219
e
220
a
221
d
222
y
223
224
h
225
a
226
s
227
228
b
229
a
230
s
231
i
232
c
233
234
i
235
n
236
f
237
r
238
a
239
s
240
t
241
r
242
u
243
c
244
t
245
u
246
r
247
e
248
249
b
250
u
251
t
252
253
p
254
r
255
i
256
c
257
e
258
d
259
260
r
261
e
262
a
263
s
264
o
265
n
266
a
267
b
268
l
269
y
270
.
271
272
P
273
o
274
s
275
t
276
-
277
2
278
0
279
1
280
0
281
282
c
283
o
284
n
285
s
286
t
287
r
288
u
289
c
290
t
291
i
292
o
293
n
294
295
c
296
o
297
m
298
m
299
a
300
n
301
d
302
s
303
304
p
305
r
306
e
307
m
308
i
309
u
310
m
311
s
312
313
b
314
u
315
t
316
317
y
318
o
319
u
320
'
321
r
322
e
323
324
p
325
a
326
y
327
i
328
n
329
g
330
331
$
332
3
333
8
334
0
335
+
336
337
P
338
S
339
F
340
.
341
342
T
343
h
344
e
345
346
r
347
e
348
a
349
l
350
351
m
352
o
353
n
354
e
355
y
356
357
i
358
s
359
360
i
361
n
362
363
1
364
9
365
9
366
0
367
s
368
369
b
370
u
371
i
372
l
373
d
374
i
375
n
376
g
377
s
378
379
w
380
i
381
t
382
h
383
384
h
385
e
386
a
387
l
388
t
389
h
390
391
s
392
y
393
s
394
t
395
e
396
m
397
398
l
399
e
400
a
401
s
402
e
403
s
404
405
a
406
n
407
d
408
409
8
410
+
411
412
y
413
e
414
a
415
r
416
417
t
418
e
419
r
420
m
421
s
422
423
r
424
e
425
m
426
a
427
i
428
n
429
i
430
n
431
g
432
.
What Your OM Needs to Address
Health System Affiliation Details
Buyers care more about the hospital network than the individual tenant names
Data to Include
Include org charts showing parent health system relationships, referral patterns, and any exclusive network agreements
Specialized Infrastructure Documentation
Medical TI isn't just carpet and paint - it's expensive specialized systems
Data to Include
Document medical gas locations, imaging shielding, backup power systems, and recent infrastructure CapEx
Parking Ratio Analysis
Medical office needs 4.5-5.5 spaces per 1,000 SF minimum
Data to Include
Show current ratios, validate with local zoning requirements, and include any shared parking agreements
Lease Structure Transparency
Medical tenants often have unique lease terms around after-hours access and common area usage
Data to Include
Detail any 24/7 access rights, emergency procedures, and how utilities are allocated for high-usage tenants
Regulatory Compliance Status
Healthcare facilities face stricter code requirements than typical office
Data to Include
Include recent health department inspections, fire department approvals, and any pending compliance issues
Re-tenanting Limitations
Highly specialized buildouts limit future tenant options
Data to Include
Be honest about spaces that are single-use (surgery suites, imaging) and include costs to convert to general medical use
Investment Outlook
Short Term
Stable but selective market through 2026. Health system tenants are gold, everything else needs scrutiny. Interest rate environment still pressuring values but medical office holds up better than general office. Expect 15-20% price discovery on anything trading.
Medium Term
2027-2029 looks stronger as outpatient migration accelerates and baby boomers hit peak healthcare usage. New supply limited by zoning and development costs. But watch for telehealth impacts on routine visit frequency.
Long Term
Demographic tailwinds are real - Massachusetts population over 65 grows 40% by 2035. Question is whether delivery models shift enough to impact space needs. ASCs and imaging centers probably safe bets. Traditional physician offices face more disruption risk.
Buyer Profile
REITs focused on healthcare, family offices wanting stable income, and some institutional buyers if the deal size works. Avoid buyers who don't understand medical real estate - they'll lowball based on office comps or get scared by specialized buildouts.
Marketing a medical office property in Boston?
DealDraft generates professional offering memorandums with market-specific data and property-type expertise built in.
Create Your OM