Healthcare Real Estate Trends Reflect Consistency, Growth, and Long Term Demand
Based on 102 transactions completed by The Frame Team in 2025, the takeaway was consistency. While other property types worked through uncertainty, healthcare real estate remained active and steady. Providers stayed focused on growth, access, and long-term positioning, keeping vacancy low across most submarkets and reinforcing the sector’s stability.
Tenant demand throughout the year centered on medical office buildings that support outpatient care. Well located properties near hospitals, dense residential areas, and major corridors consistently outperformed. Practices prioritized functional layouts, strong parking ratios, and spaces that support patient experience and operational efficiency, while outdated or poorly configured buildings saw less interest.
Healthcare groups approached real estate decisions with confidence. Many practices expanded or relocated to better serve growing patient volumes, while larger systems focused on strengthening their regional presence. Lease terms continued to trend longer, reflecting a desire for stability and control in an evolving healthcare landscape.
On the investment side, healthcare continued to attract strong interest. Pricing remained firm as investors favored the sector’s durable demand and credit quality. Private buyers and owner users were especially active, targeting well maintained assets with stable tenancy and long-term upside.
By year end, healthcare real estate stood out as one of the most reliable asset classes. Steady demand, resilient occupancy, and long-term fundamentals position the market well heading into 2026.
South Puget Sound 4Q25 Insights
| Total SF | 8,690,241 |
| Vacancy | 2.43% |
| Vacant SF | 216,350 |
| Average Class A Asking Rent PSF NNN | $33.00 |
| Average Class B Asking Rent PSF NNN | $27.00 |
| Average Months to Lease | 3-9 Months |
| Average Market Sale Price PSF | $320.00 PSF |
| Average Market Cap Rate | 6.75% |
| Average Months to Sale | 4 – 9 Months |
The information in this update was composed by the Kidder Mathews healthcare and office brokerage team of Drew Frame, SIOR, and Ryan Kershaw.
Data source: CoStar
About the Frame Team
As members of the Kidder Mathews Healthcare and Office groups, Drew Frame, SIOR and Ryan Kershaw are experts in healthcare and office services, specializing in landlord and tenant representation, as well as sales, including investment and owner/user. The team has completed over $243,000,000 in sales in the last 24 months and actively represent more than 3 million square feet of property. For more information, visit kmteamframe.com.
About Kidder Mathews
Kidder Mathews is the largest fully independent commercial real estate firm in the Western U.S., with over 900 professionals in 19 offices across Washington, Oregon, California, Nevada, and Arizona. We offer a complete range of brokerage, appraisal, asset services, consulting, and debt & equity finance services for all property types. Kidder Mathews averages over $9 billion in transaction volume, manages more than 54 million square feet of space, and conducts 2,700 appraisal, consulting, and cost segregation assignments annually. For more information, visit kidder.com.
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Contact
Drew Frame, SIOR, Senior Vice President
Ryan Kershaw, Investments Specialist
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