Medical Office Building Financing

Medical office buildings (MOBs) represent one of the most stable segments of commercial real estate, driven by the essential nature of healthcare services and the aging U.S. population. Lenders favor medical office properties for their creditworthy tenants (health systems, physician groups, insurance companies), long lease terms, and high tenant retention rates due to the cost of relocating specialized build-outs.

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Medical Office Building Financing

Medical office financing benefits from the non-discretionary nature of healthcare demand, making these assets more recession-resistant than general office. Properties located on or near hospital campuses, with long-term leases to credit-rated health systems, attract the most competitive terms from life insurance companies and CMBS lenders. Outpatient surgery centers, dialysis clinics, dental practices, and specialty medical facilities each have unique underwriting considerations. Commercial Lending Solutions structures financing for the full range of healthcare real estate, from single-tenant physician offices to large medical campus developments.

Medical Office Subtypes

  • On-Campus Medical Office
  • Off-Campus Medical Office
  • Outpatient Surgery Centers (ASC)
  • Dental & Orthodontic Offices
  • Dialysis Centers
  • Urgent Care & Walk-In Clinics
  • Veterinary Hospitals
  • Medical / Biotech Lab Space

Financing Options

  • Life Insurance Company Loans
  • Bank Permanent Loans
  • CMBS
  • Bridge Loans
  • Construction Loans
  • SBA 504 / 7(a) (Owner-Occupied)
  • HUD / FHA Programs

Financing Programs

Medical Office properties qualify for a variety of commercial loan programs. Explore your options.

Medical Office Financing FAQ

Lenders favor medical office buildings because healthcare is a non-discretionary service, making tenant demand recession-resistant. Medical tenants sign longer leases (7-15 years vs. 3-5 for general office) due to expensive specialized build-outs, creating stable long-term cash flows. Creditworthy health system tenants and the aging population driving healthcare demand further strengthen the lending thesis.
Medical office permanent loan rates typically range from 5.25% to 7.00%, which is generally 25-50 basis points lower than comparable general office properties due to the stronger fundamentals. Life insurance companies and CMBS lenders offer the most competitive rates for stabilized MOBs with long-term health system leases. Bridge and construction loans range from 7.00% to 10.00%.
Yes, significantly. On-campus or adjacent-to-hospital medical office buildings receive the most favorable financing terms because of the built-in patient referral network and tenant stability. Off-campus MOBs in healthcare corridors or near major medical centers also finance well. Standalone medical offices in suburban locations may face slightly higher rates and lower LTV limits.
Yes. Owner-occupied medical office buildings qualify for SBA 504 and 7(a) financing with as little as 10% down. This is ideal for physician groups, dental practices, veterinary hospitals, and specialty clinics purchasing their own building. SBA financing offers below-market fixed rates and 25-year amortization.
Medical office leases are typically NNN (triple net) or modified gross, with 7-15 year initial terms and multiple renewal options. Tenant improvement allowances are higher than general office due to specialized build-outs (plumbing, electrical, lead-lined walls for imaging). Lenders view these long leases and high switching costs favorably, often offering higher LTV and lower rates than general office.

Finance Your Medical Office Property

Contact CLS CRE for a free, no-obligation quote on medical office financing. We respond within 24 hours.

Apply for Financing →
Or call us: 310.758.4042

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