The Evolving Landscape of Hospital and Medical Office Development
Healthcare delivery across the Commonwealth is evolving rapidly, and real estate is no longer a passive backdrop to that change. As healthcare systems navigate economic pressure, regulatory complexity, and shifting models of care, the physical environments that support patients, clinicians, and communities must be more flexible, intentional, efficient, and resilient.
At a recent NAIOP MA panel, The Future of Healthcare Real Estate in MA: Strategy, Growth, and Redevelopment, Eric Schlager, CEO of Bulfinch, shared his perspective on the forces reshaping healthcare real estate across the Commonwealth. He joined an esteemed group of industry leaders for a timely discussion on strategy, growth, and redevelopment in Massachusetts’s evolving healthcare landscape.
Panelist:
- Blake McLaughlin, Managing Director of Newmark
- Lisa Hogarty, SVP Real Estate Planning and Development of Boston Children’s Hospital
- Wendy Gettleman, Vice President of Facilities Management and Real Estate of Dana-Farber Cancer Institute
- Mahmood Malihi, Co-President of Leggat McCall Properties
At a time when society continues to shift from “sick care” to “health” care, the implications for real estate are profound. As the patient experience transforms, healthcare delivery is becoming more proactive, decentralized, and consumer-driven. That evolution requires a different physical footprint—one built around accessibility, convenience, and integration, rather than solely anchored to major hospital campuses. For real estate owners and investors, this transition represents both a challenge and a tremendous opportunity to align assets with how care is actually being delivered.
Medical Office Sector
Medical office continues to be a high-performing and very secure sector. Healthcare fundamentals remain exceptionally strong, supported by demographic tailwinds, steady demand, and the essential nature of care delivery. Capital markets reflect that confidence: liquidity remains robust with continued compression in core cap rates for high-quality medical office assets. In a volatile broader market environment, healthcare real estate stands out for its durability and long-term stability.
In Boston, the evolving dynamic between (MGB) Massachusetts General Brigham and Beth Israel Lahey Health/Dana-Farber Cancer Institute is creating significant market activity. While organizational change can introduce short-term disruption, it also catalyzes investment, development, and innovation. There is real optimism that this next chapter could position Boston as the cancer-treatment capital of the world, reinforcing Boston’s global leadership in healthcare, research, drug discovery, and specialty care.
A major driver of real estate transformation is migration to outpatient care. Lower costs, abundant free parking, technological advancements, and consumer expectations are accelerating the shift of lower acuity care away from hospital campuses and into distributed networks of facilities. We are seeing growth across walk-in and retail clinics such as CVS Health, Walgreens, and One Medical and expanded urgent care platforms including freestanding emergency departments, ambulatory surgery centers, and even micro-hospitals. Patients increasingly expect to avoid ten-hour emergency department waits in favor of high-quality, conveniently located alternatives much closer to home.
How is Artificial Intelligence impacting healthcare?
Overlaying all of this is artificial intelligence, arguably the most transformational technology since electricity. AI is reshaping diagnostics, care coordination, operational efficiency, and even how facilities are designed and staffed. Its impact will touch every aspect of medicine, and by extension, every aspect of healthcare real estate—from space programming to data infrastructure to long-term capital planning.
The transition from sick care to healthcare is not theoretical—it is actively reshaping markets today. For real estate stakeholders, understanding these trends is essential to staying aligned with the next generation of care delivery.
Bulfinch’s Edge
At Bulfinch, we’ve long believed that successful healthcare real estate development requires a long-term mindset. These are mission-driven projects with real community impact, and they demand partners who understand the regulatory environment, the market, and the operational realities of healthcare systems. Real estate has the power to enable growth, improve patient care and access, and support innovation when it is approached strategically.
As the Commonwealth continues to adapt to new healthcare realities, collaboration across disciplines will be essential. By bringing together developers, healthcare providers, brokers, and planners early in the process, we can deliver environments that are functional and future-ready, supporting better care, stronger communities, and sustainable growth.
To learn more about Bulfinch’s commercial and medical office portfolio
About the author: Eric D. Schlager is the Chief Executive Officer of Bulfinch, overseeing investment strategy and general company operations. With more than 30 years of experience in real estate, Eric has helped Bulfinch emerge as one of Greater Boston’s leading commercial real estate firms by delivering on the company’s “vision to value” mission through innovative investment and acquisition strategies. He is a passionate supporter and advocate of several philanthropic organizations, many of which are focused on medical and healthcare advancements, and is actively involved with numerous business and civic organizations.