The medical office building (MOB) sector entered 2026 with renewed momentum, supported by healthier capital markets, increased lender interest and steady property performance. According to Cushman & Wakefield’s MOB Capital Markets Mid-Year 2026 Update, capital was more active in healthcare real estate in the first half of the year, aided by demographic trends and the asset class’s track record of consistent returns.
The report found that MOB investment volume climbed to $6.7 billion in the first six months of 2026, representing a 21% increase from the same period in 2025. While the number of transactions declined by 15%, the average deal size grew to $20 million. Cushman & Wakefield said this shift reflected ongoing investor preference for larger, institutional-quality opportunities in the segment.
Pricing metrics also pointed to a firming market. Cap-rate compression signaled more competition for assets and stronger valuations. Investors continued to be drawn to MOB properties by their combination of stable rent growth, limited new supply and high occupancy levels. Rents increased 2% year over year, although the report noted that inflation has begun to outpace rent gains.
Debt markets showed notable improvement alongside the pickup in equity flows. Loan origination for MOB assets expanded 88% year over year, supported by stronger investment demand and more transaction activity. Banks remained the dominant source of financing, accounting for nearly three-quarters of MOB loan originations over the past five years.
Financing costs also eased from recent peaks. Fixed-rate debt costs were 80 basis points below their 2023 high, and Cushman & Wakefield observed that lenders were more willing to assume fixed-rate risk and to lend at higher loan-to-value ratios. The sector’s appeal to lenders is underpinned by resilient property fundamentals, steady income and strong cash flow performance.
Income returns for MOB assets have stayed above 5.5% for seven consecutive quarters, and appreciation returns have moved back into positive territory, according to the report. Cushman & Wakefield said this combination of reliable income and renewed price growth reinforces the sector’s position as one of the more compelling options within commercial real estate, even as inflation, interest rates and other macroeconomic factors remain uncertain.
Looking ahead to the rest of 2026, high occupancy and ongoing rent growth are expected to support performance, with investors emphasizing income returns in their underwriting. With appreciation resuming, the report suggested that buyer conviction in the sector should continue to build. At the same time, it noted that supply-demand dynamics bear watching, as elevated construction costs are likely to constrain new development activity.
The timing and extent of monetary policy easing also remain unclear, given persistent inflationary pressures. Even so, Cushman & Wakefield concluded that consistent cash flow, improving capital availability, strong investor demand and a long-term record of stable performance position MOB as a preferred allocation for capital within healthcare real estate.
