By Ben Reinberg, Founder and CEO, Alliance Consolidated Group of Companies
LinkedIn: Ben Reinberg
LinkedIn: Alliance Consolidated Group of Companies
Ask most investors what makes a medical office building (MOB) worth owning and you’ll hear the usual list: tenant mix, location, the demographics of the surrounding zip codes. However, the feature I’d put at the top of that list these days sits above the ceiling tiles, where nobody bothers to look. Walk a new building. Skip the exam rooms. Go find the server closet and trace the conduit runs, because that’s the part of healthcare real estate almost nobody talks about, and it’s the part that decides whether the building can hold a modern medical tenant or not.
Outpatient visits are set to grow by hundreds of millions over the next few years, and every single one of them leans on technology the building has to carry. The blunt version for anyone writing checks is: digital infrastructure isn’t a back-office detail anymore. It’s a competitive advantage, which drives occupancy, tenant retention, and what the asset is worth down the road.
The IT load moved with the care
A hospital is, among other things, a giant technology hub. Electronic health records, imaging archives, telehealth platforms, remote monitoring feeds, all of it used to live behind one campus firewall with a dedicated IT department down the hall. When care scattered into dozens of outpatient locations, the technology load scattered with it. It didn’t shrink. It multiplied.
A single MOB now has to do what hospital infrastructure used to do, just at smaller scale and without an army of technicians on site. EHR systems need fast, reliable connectivity all day. Telehealth doesn’t tolerate a flaky connection, because a frozen video call with a cardiologist isn’t an inconvenience, it’s a failed appointment. Patient portals, digital check-in, remote monitoring of patients at home, all of it terminates somewhere, and that somewhere is increasingly a five-story building in a suburb.
So, the system has gone from one technology center to a network of them. Dozens of locations that have to share patient data securely, run cloud applications without hiccups, and stay connected to each other and to the health systems behind them. That’s a real estate problem as much as an IT problem, because the building either supports it or it doesn’t.
What medical tenants actually ask about now
Ten years ago, a physician group touring space asked about parking, signage, and proximity to the hospital. They still ask about those things, but the conversations I hear about now go somewhere else fast: what’s the fiber situation, is there redundant power, can the building handle imaging equipment that generates terabytes, what happens to my practice when the power blips.
That shift is showing up in leasing decisions. As owners and operators, we’re watching tenants put digital infrastructure on the same level as location and parking, and in some negotiations it’s become the deciding factor. Buildings with robust fiber, backup power, and the electrical capacity for data-heavy clinical equipment are winning tenants. The ones without it get passed over even in good locations, because retrofitting a 1980s office building for modern clinical IT is expensive and disruptive, and tenants know it. Cybersecurity rides along with this. Healthcare has been the most-breached industry for over a decade running, and a tenant’s security posture starts with the physical infrastructure their network sits on.
AI is raising the bar again
Just as buildings catch up to the EHR-and-telehealth era, the bar moves again. AI is accelerating demand for faster data transfer, far larger imaging files, and a lot more computing capacity on site. Imaging is the clearest case: AI tools that read scans alongside radiologists are only useful if the scans move fast, and scans only move fast on infrastructure built for it. The practical takeaway is that buildings struggling to support today’s digital requirements may go functionally obsolete much sooner than their owners expect.
I don’t think most of the industry has priced this in yet. The MOBs being designed right now, the good ones anyway, treat digital infrastructure as a first-class requirement, the same tier as patient access and clinical layout. The older stock either gets upgraded or slowly loses its tenant base to buildings that did.
The headline is that healthcare moved out of the hospital. The fine print is that the hospital’s technology backbone had to come along, distributed across hundreds of buildings that were never designed to carry it. The next generation of healthcare real estate winners won’t simply own the best locations. They’ll own the buildings that can carry the digital infrastructure modern medicine runs on. As outpatient care keeps expanding, technology readiness is going to matter as much as tenant quality in deciding which assets perform over the long run.