Medical & Dental Complexes
Purpose-built clinical property, financed for the practices that occupy it and the investors who own it.
Medical and dental complexes are among the more durable commercial property investments, for a reason that has nothing to do with the real estate: the tenants are extremely expensive to move.
A dental practice fitting out a suite installs plumbing and vacuum lines to every operatory, compressors, lead shielding, specialist electrical work and equipment bolted to the structure. A surgical or imaging facility goes considerably further. That investment is largely unrecoverable, and it means clinical tenants renew at rates general office landlords do not see.
What we finance
- Multi-practice medical and dental complexes
- Standalone clinical office buildings
- Surgical and imaging centres
- Dental practices and orthodontic suites
- Physician, surgeon and specialist offices
- Wellness and outpatient clinics
Owner-occupied: look at SBA first
If your practice will occupy the building, SBA 504 and 7(a) financing is very likely your best available terms — as little as 10% down on qualifying projects, against the 25% to 35% a conventional investment loan would ask for.
For a practice that has been leasing for years, the case is often simply arithmetic: a comparable monthly payment builds equity in an asset you keep, and many practitioners hold the building after selling the practice, letting it become retirement income with the incoming buyer as the tenant.
Investment purchases
For investors, the appeal is tenant stickiness and creditworthiness. Established practices are stable businesses with predictable revenue, and lease terms tend to run longer than general office.
The counterweight is specialisation. Purpose-built clinical space suits a narrower pool of replacement tenants, and generic conversion is expensive. Lenders will ask how readily the improvements would serve a different practice type, and buildings near a hospital or an established medical corridor answer that question far better than isolated ones.
Practical points that affect financing
- Parking ratios. Clinical use generates far more visitor traffic per square foot than ordinary office. Inadequate parking is a real constraint on value and on leasing.
- Location relative to referral networks. Proximity to hospitals and complementary practices drives demand for the space.
- Who paid for the improvements. Tenant-funded fit-out strengthens renewal probability; landlord-funded fit-out has to be re-amortised each time a tenant leaves.
- Compliance. Accessibility, medical waste handling and any state licensing attached to the facility all come up in diligence. Have the documentation in order.
Buying or building clinical space?
Owner-occupied practices often qualify for SBA terms with as little as 10% down. Worth checking.