Medical Office Building (MOB) & Clinical Healthcare Real Estate Financing
BancorpOne structures senior debt, permanent mortgages, and bridge-to-stabilization facilities for Medical Office Buildings (MOBs), outpatient care centers, and clinical multi-tenant healthcare properties. Backed by non-discretionary patient demand, heavy specialized tenant buildout investments, and hospital system affiliations, MOBs command premier terms from commercial banks, life insurance companies, and healthcare REITs.
Indicative Underwriting Matrix
All loan structures, covenants, and amortization terms are evaluated by participating commercial lenders based on hospital sponsorship, weighted average lease term (WALE), tenant retention history, and submarket medical vacancy.
Underwriting Fundamentals for Medical Office Real Estate
Medical Office Buildings are among the most defensive and resilient asset classes in commercial real estate. Because healthcare providers invest significant capital into examination rooms, specialized medical gas piping, lead-lined imaging suites, and surgical equipment (often $100 to $250+ per square foot in tenant improvements), physicians rarely relocate once established.
Commercial lenders distinguish between on-campus MOBs (physically connected to or adjacent to a major acute-care hospital) and off-campus outpatient centers. On-campus facilities benefit from direct physician hospital referral pipelines, while off-campus centers provide convenient community retail accessibility and lower parking costs. BancorpOne acts as a commercial mortgage broker, matching healthcare real estate sponsors with lenders offering competitive pricing and flexible tenant improvement reserves.
- Hospital System Lease Covenants: Properties where a regional hospital network leases 30% to 50%+ of the net rentable area qualify for prime life company debt pricing.
- Tenant Specialty Diversity: Balanced tenant rosters combining primary care physicians, dental practices, orthopedic specialists, and diagnostic imaging centers provide cash flow diversification.
- Stark Law & Anti-Kickback Compliance: Lenders verify that physician leases reflect fair market value rents without unlawful hospital referral subsidies.
Frequently Answered Financing Questions
Verified answers to common borrower and broker inquiries regarding loan sizing, guidelines, and execution.
How do lenders evaluate on-campus vs off-campus medical office buildings?
Lenders value on-campus MOBs for hospital referral synergy, but require review of hospital ground leases and restrictions. Off-campus MOBs are valued for consumer accessibility and parking convenience.
Both formats attract strong institutional liquidity; on-campus assets command lower cap rates, while off-campus outpatient centers often provide higher initial cash flow yields.
Size Medical Office Loan →Does BancorpOne finance physician practice owner-occupied medical suites?
Yes. For medical practices occupying 51% or more of the building or medical condo, BancorpOne can arrange SBA 504 financing with up to 90% loan-to-cost.
SBA financing enables doctors and medical groups to purchase their clinic real estate with minimal down payment and long-term fixed debenture interest rates.
Explore SBA 504 Medical Loans →