Medical Office Financing
Your practice owns or wants to own its building. The income is strong, the tenancy is sticky — and the lender still has to understand how healthcare real estate actually works.
Why medical office is its own asset class
Medical office sits in a strange middle ground in commercial lending. On one hand, it's among the most desirable collateral in the market: healthcare tenants sign long leases, invest heavily in their buildouts, and almost never leave — moving a practice means moving patients. On the other hand, the underwriting has real wrinkles. Single-specialty buildings can be hard to re-purpose, buildouts are expensive and tenant-specific, and when the borrower is the practicing physician, the real estate and the operating business are financially entangled.
Two profiles show up most. The owner-occupant physician or dentist buying or refinancing the building their practice runs from — often the strongest borrower profile in small commercial lending, eligible for high-leverage SBA and conventional owner-occupied programs. And the investor acquiring a leased medical office building or ambulatory surgery center, where underwriting centers on tenant quality, lease terms, and the healthcare demand in the trade area.
Why medical office deals get stuck
What medical office lenders look for
How Denali approaches medical office deals
Denali Commercial Mortgage, founded in 2012 and based in Happy Valley, Oregon, in the Portland metro, places medical office financing for both practicing healthcare owners and investors. Our team's 40+ years of combined commercial lending and finance experience includes the practice-and-property structures that generalist lenders find confusing — we separate the real estate story from the business story and present each to the capital that fits it.
Physicians and dentists buying their own building typically route to SBA or conventional owner-occupied programs with leverage up to 90%. Investors acquiring leased medical assets route to small balance, conduit, or bridge depending on lease term and tenancy. Every transaction receives individual review, and terms are quoted per deal — request current terms for your scenario.
How It Works
- 1
Get Qualified
- 2
Consultation
- 3
Documents
- 4
Review
- 5
Term Sheet
- 6
Underwriting
- 7
Conditions
- 8
Closing
Common Questions
I'm a physician. Should my practice own its building?
Many owner-occupant physicians find ownership compelling: you build equity instead of paying rent, control your buildout and location permanently, and can hold the building in a separate entity that leases to your practice. Whether the numbers beat leasing depends on your market and how long you'll practice there — worth modeling before you buy.
How much can an owner-occupant physician borrow?
SBA and conventional owner-occupied programs reach up to 90% loan-to-value for practice-owned real estate, and some structures combine the building purchase with practice financing in one package. The practice's cash flow services the debt, so collections history matters more than personal income documentation.
I want to buy a medical building as an investment. What's different?
Underwriting centers on the lease: the tenant's creditworthiness, years remaining, renewal options, and reimbursement environment. Long-leased buildings to strong healthcare systems price like the bond they resemble; short-leased or single-specialty buildings get underwritten more conservatively and price accordingly.
The building has a surgery suite. Does that hurt financing?
It changes it. Heavy, specialized buildouts limit the re-leasing pool, which conservative lenders penalize — but healthcare-specialized lenders credit the investment as a powerful anchor keeping the tenant in place. Lender selection matters more on specialized medical collateral than almost any other office type.
Tell us about your deal. We will tell you what fits.