The Rise of Co-Tenancy in Healthcare Real Estate: Smart Strategy or Risky Play?

More and more, we’re seeing providers teaming up under one roof. A behavioral health practice shares space with a primary care group. A PT/OT clinic operates out of the same building as a med spa. Sometimes it’s one landlord—sometimes it’s two tenants splitting a lease.

It’s called co-tenancy, and it’s becoming a trend in healthcare real estate.

There’s a lot to like. You get shared waiting rooms, lower overhead, cross-referrals, and better space utilization. For landlords, it can help fill space faster and build synergy within a property.

But it’s not all upside. Co-tenancy also requires tight operational coordination, strong legal agreements, and clear communication about brand identity and patient flow.

Here’s where it gets tricky:

• If one tenant is seeing high volume and the other isn’t, tension can build fast.

• If patients show up confused about where to go or who they’re seeing, the experience suffers.

• If services overlap too much—or not at all—you miss the opportunity for real synergy.

From a valuation perspective, a co-tenanted facility can still perform well, but only if the business model is stable and the layout supports both tenants effectively. If it feels like two practices crammed into one lease, you lose value.

Done right, though? It works. Especially for newer providers, niche specialties, or health systems testing the waters in new markets.

Co-tenancy might not be the future of all healthcare real estate, but in the right circumstances, it’s a smart way to maximize revenue per square foot while minimizing risk.

📅 Book a call if you’re considering a co-tenant setup or have a space that could support multiple providers.

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