As healthcare startup names go, Eternal is certainly not subtle. 

An athlete-focused care clinic started by a cofounder of The Athletic, Eternal raised $13 million earlier this year for high-performance healthcare, with locations in New York and San Francisco. Clients come in for proprietary testing in what’s essentially a wired gym, submitting to bloodwork, bone scans, and workout sessions measuring numerous performance metrics to arrive at an action plan that gets reevaluated after six months. Annual membership costs $4,800. 

“The idea is that we’re all aging at some point, so when you’re 70 years old, you’re probably going to look back and either thank the person that you were when you were younger, or maybe need to take better care of yourself,” Charlotte Winthrop, Eternal’s chief marketing officer, said.

Like other startups catering to high-end clientele, Eternal highlights how new demand for preventative care — as well as a boom in venture capital funding — is creating a new tier of boutique fitness and healthcare. The wellness industry’s push into brick-and-mortar spaces represents an upgrade for clients who want even more data-driven health and a “concierge-level experience,” Joe Vennare, cofounder of industry newsletter Fitt Insider, said. 

But the med office real estate boom isn’t limited to upper-crust athletes. Eternal represents just one facet of a real estate explosion focused on smaller, more dispersed medical, wellness, and healthcare offices. Real estate brokerage JLL found the medical outpatient building sector is seeing “significant growth,” with leasing for these types of tenants up 15% nationally in Q4 2024, reaching 19 million feet of new leasing activity. 

Doctors might call this surge in leasing a case of comorbidity. The pandemic gave hospital and healthcare systems a vision of remote and virtual care and the potential of making it easier to reach patients. Diagnostic tools have also advanced and become more compact, enabling caregivers to consider smaller facilities. 

Importantly, hospitals and health systems used to charge substantially more — up to 50% in some cases — to perform the same service at their central campus, until a wave of reform legislation introduced a decade ago began to level the playing field in favor of what’s called site neutrality. Healthcare systems realized it was becoming less economically viable to offer certain services with lower margins at the most expensive real estate they owned, and expanding hospitals can be expensive. That pressure has pushed medical systems to open up smaller satellite outpatient locations as a way to save money. Staffing figures support this shift; today, 6.8 million healthcare workers operate from medical outpatient buildings, versus 5.5 million in hospitals, figures that were even just 15 years ago. Another real estate brokerage, CBRE, found that 80% of medical facilities under construction today aren’t hospital-adjacent.

“Hospitals are trying to move as much off campus as they possibly can so they can backfill that space on campus with high-value services like surgeries, inpatient care, and high-acuity-level stuff,” said Matt Coursen, who leads JLL’s healthcare leasing advisory services. “The lower-acuity stuff is going out into the community more than ever before.”

It also doesn’t help that hospital systems are experiencing significant financial distress postpandemic, said Katie Reilley, senior director of healthcare strategy for Ankura, a national consultancy with a healthcare focus. Shifting care to a leased office means less capital spending on facilities.

There aren’t many segments of the retail world that are growing, so what Coursen calls the “med-tail” world, like high-end dental and primary care facilities, is finding a new home in retail centers built near residential areas and potential patients. Some private primary care chains have been expanding, too, like Amazon One Medical, which is continuing to add new locations this year even after competitors Walgreens and Walmart expressed frustration finding profitable ways to grow.

Technology coupled with demographic changes — namely the so-called “silver tsunami” of an increasing older adult population — will boost demand for healthcare services, exciting many investors about the opportunities this space presents. CBRE’s analysts forecast increased activity this year, with spillover leasing into underutilized office space to meet growing demand. Boston, Houston, Dallas, and Orlando are all expected to have more than half a million square feet of leasing this year each.

Treatments and care that used to require a visit for a hospital can now be done in a small office adjacent to a grocery store. Outpatient volumes are expected to grow 10% in the next five years, leading existing medical providers to expand into suburban and Sunbelt markets to reach patients. 

The demand has been pushing past traditional medical offices, with many clinics taking up space in unused retail locations. Coursen said that a Pier 1 imports retail site makes a good candidate for retrofitting into a specialty clinic, and a big-box retail store can be transformed into a medical clinic. Because of the ancillary benefits, landlords have been excited to lease space that they traditionally wouldn’t have given over to medical tenants, said Meghann Martindale, who leads retail intelligence for Avison Young. Repeat visits and new foot traffic benefit surrounding retail properties. Healthcare spending also represented 22% of consumer spending in 2023, per CBRE figures. 

The high-end longevity clinics and fitness sites remain a niche compared to the larger medical office, but they’re poised to flex their financial muscles in coming years. The list of new startups and franchises tapping into wellness trends has exploded: Humanaut, a longevity and health clinic, raised $8.7 million last fall and has three locations open or in the works; Sunday Health, a dementia care startup, signed a lease in January for its first brick-and-mortar facility in Alexandria, Virginia; longevity platform Biograph has two locations, in New York City and the Bay Area; and competitor Fountain Life boasts six clinics, including a new site in Miami. These facilities offer slick, streamlined, and spa-like spaces — table stakes for the high-end crowd they’re seeking to attract.

Fitt Insider’s Vennare also highlighted Neko Health, an AI-powered body scanning startup backed by Spotify founder Daniel Ek with locations in London and Stockholm, which raised $260 million for further expansion into Europe and the US. He sees the industry growing substantially in the next few years. It won’t just be one-off clinics in wealthy neighborhoods, but a “bolt-on” category, where gyms or even hotels with a wellness angle will seek to colocate with these facilities. 

“This will be an expected part of the wellness and health journey,” he said.