Physician practice consolidation is driving demand for both larger multispecialty medical office buildings and smaller neighborhood clinics, according to Colliers’ third-quarter 2026 healthcare services report, GlobeSt reported Oct. 14.
Hospital systems, corporate owners and private equity firms continue to absorb smaller practices. The share of physicians in private practice fell from 60.1% in 2012 to 42.2% in 2024, according to American Medical Association data cited by Colliers.
As practices combine, Colliers expects them to seek larger, more efficient buildings that put multiple specialties, administrative functions and advanced technology under one roof. Larger groups may also lease several properties at once, which gives investors more stable, large-scale leasing opportunities.
The shift away from hospital campuses pulls demand in the other direction. Physician groups may also grow through smaller, more numerous community clinics and ASCs. That means one organization could need a central medical office and a network of outpatient sites.
Consolidation also gives practices access to capital for facility upgrades. Colliers said buildings will need robust IT infrastructure, flexible telemedicine rooms and the capacity to support data management, AI and automation. Because corporate and private equity owners focus on cost control, they could push standardized designs that improve patient flow and staff productivity.
Demand reaches beyond clinical space. Management services organizations, which handle billing, HR, IT and marketing for physician practices, need separate administrative space of their own.
Healthcare venture capital remains concentrated in Boston, New York and the San Francisco Bay Area. Colliers said that concentration could support continued real estate investment in those hubs.
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