JLL report finds rising costs and regional variations challenge healthcare facilities

CHICAGO, Feb. 11, 2026 - Increased demand for outpatient medical care, widening cost variables and limited new construction are shaping the fit-out landscape for medical outpatient buildings (MOB) across the United States. JLL's 2026 Medical Outpatient Building Fit-Out Cost Guide details essential cost benchmarks and market intelligence for healthcare providers, investors and facility managers navigating a dynamic and challenging environment.

"With limited new construction for medical outpatient space, healthcare companies are looking to refit existing space and want to do this in a cost-efficient manner," said Matt Coursen, U.S. Healthcare Lead, Leasing Advisory, JLL. "As outpatient care volumes grow and tech needs evolve, occupiers are optimizing existing assets as a critical step towards capturing market share and supporting efficient, accessible patient services."

The transformation of healthcare real estate is accelerating, as a slowdown in ground-up construction is causing occupiers to look at how to best fit-out existing space or renovate existing facilities. With new MOB starts at a record low - just 1% of inventory with most new builds pre-leased - the landscape is shifting to more complex project delivery and heightened regional cost sensitivity, impacting healthcare providers, real estate investors and community outcomes nationwide.

"Healthcare real estate decision-makers must balance speed, flexibility and quality as they respond to the unique demands of each market," said Dan Squiers, Managing Director, Healthcare Lead, Project and Development Services, JLL. "Labor availability, growing compliance requirements - like California's seismic upgrades - and the migration of advanced clinical services into outpatient settings require highly tailored project scoping and value engineering. Our clients increasingly look to us to help optimize their capital investments and manage cost and schedule risks."

Nationally, the average "all-in" fit-out cost for medical outpatient facilities has reached $412 per square foot in 2026. With most new buildings pre-leased, providers are turning to renovations and adaptive reuse, where complexity and labor market conditions are significant contributors to price.

JLL's report points to several key trends for 2026:

• Outpatient care migration: Projected outpatient volumes are set to grow 7.8% over the next five years, with demand surging spaces to support low-intensity medical services like endocrinology and psychiatry as well as complex procedures requiring specialized, high-intensity fit-outs.
• Technology-driven budgets: Non-medical FF&E (furniture, fixtures & equipment) and AV/IT infrastructure are becoming major contributors to total project spending, closely tied to new models of tech-enabled care.
• Increasing fit-out costs for high-acuity services: As more complex procedures move from hospitals to outpatient settings, fit-out costs rise sharply due to advanced MEP (mechanical, electrical, plumbing), equipment integration and structural accommodation.
• Regional price sensitivity: Labor rates, delivery conditions and regulatory demands, including seismic retrofitting in California and high-volume construction activity in Texas, are driving significant variation in costs and timelines.
• Fit-out complexity: Renovations in existing MOB spaces often require phasing and off-hours work, increasing both delivery costs and operational challenges.

"As outpatient care expands, healthcare leaders are navigating a complex landscape where construction starts are limited and delivered pricing is highly specific," said Kari Beets, Senior Manager, Research, JLL. "Rapid technology adoption and the rise of higher-acuity ambulatory services are driving up capital expenditure. Early involvement of project controls and cost management specialists has never been more critical for successful project planning and execution."

Looking ahead, labor and specialized trade constraints remain the leading drivers of cost escalation and schedule risk for healthcare construction, particularly in high-demand markets. Proactively planning for tighter subcontractor pricing and managing timelines carefully will be key.

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