Medical office earns a lower cap rate than ordinary office space for one reason: the improvements are expensive and the tenants rarely move. Plumbing, lead shielding, specialised electrical and a surgical suite are not costs a practice walks away from at lease expiry, and lenders price that stickiness.
What the file turns on
Tenant mix and credit, proximity or affiliation to a hospital system, remaining lease terms, and how much of the build-out was tenant-funded.
Where deals fail
A single-practice building with a retiring owner and no succession plan, and space so specialised that a general-office tenant could never backfill it.
Owner-occupied practices
A dentist or physician buying their own building is a different file from an investor buying a multi-tenant one — practice cash flow does the work, and SBA structures are often the better route.
Our minimum loan is $200,000. We are a direct commercial lender working across the 43 states we serve, in business since 1998. We do not publish a rate for this product because the number depends on the file — call and we will quote the deal in front of us.
SBA loans · Commercial lending · Investment property financing · All loan types · All property types