When the Right Space
Doesn’t Exist — We Build It.

Ground-up medical office development typically takes 24 to 42 months from initial concept through certificate of occupancy, depending on project complexity, market, and entitlement environment. The phases break down roughly as: site selection and feasibility (2 to 4 months), entitlement and permitting (6 to 18 months depending on jurisdiction and project complexity), design and construction documents (4 to 8 months), and construction (12 to 18 months for most medical office buildings). ASC and hospital outpatient development may take longer due to regulatory approvals. Markets with complex entitlement environments — particularly New Jersey and New York — typically run toward the longer end of these ranges. We provide a project-specific timeline in our initial feasibility analysis.

A development feasibility study evaluates whether a proposed project is financially viable, programmatically appropriate, and achievable within the intended market and timeline. For medical office development, it includes: clinical demand analysis confirming physician need and patient volume to support the proposed program; site assessment covering zoning, infrastructure, access, and environmental; preliminary construction budget with current cost benchmarks; pro forma financial analysis including development cost, projected rents, stabilized NOI, and projected return on cost; financing structure assessment; and a comparative analysis of development versus acquisition of existing inventory. Our feasibility studies are prepared to institutional standards and are used to support lender presentations, physician co-investment discussions, and final development decisions.

Physician-developed medical office buildings are typically financed through a combination of developer equity, physician co-investment, and construction lending. Common structures include: a physician LLC or limited partnership that owns the development entity, with physicians contributing equity as limited partners alongside a developer or advisory firm as general partner; construction-to-permanent financing from a regional or national lender, typically requiring 20 to 30 percent total equity in the project; and in some cases pre-leasing commitments from anchor physician tenants that support higher loan proceeds. Our Clinical Investment team structures physician co-investment and coordinates with lenders — including our relationships with healthcare-focused construction lenders — to optimize the capital stack for each project.

A medical office building (MOB) is a commercial building designed for physician office practices and outpatient clinical services — exam rooms, consultation suites, imaging, infusion, and other non-surgical clinical functions. An ambulatory surgery center (ASC) is a licensed surgical facility subject to CMS certification and state health department approval, designed specifically for outpatient surgical procedures with operating rooms, sterile processing, pre-op and recovery areas, and the infrastructure to support anesthesia. ASCs are more complex to develop, require regulatory navigation from day one, and involve different design standards and approval processes than standard MOBs. Some development projects combine both — a ground-up MOB that includes an ASC component — which requires managing both regulatory tracks simultaneously.

Yes, and in many cases physician ownership of the practice facility is one of the most effective long-term wealth-building strategies available. Physicians can own their practice building individually, through a physician LLC or limited partnership, or as part of a co-investment with our Physicians Fund. Ownership eliminates renewal risk, builds equity through mortgage paydown and appreciation, and can generate rental income through a lease from the physician’s practice entity to the real estate entity. For tax planning purposes, the structure of this arrangement should be coordinated with legal and tax counsel. The primary considerations against ownership are capital requirement, reduced liquidity, and the complexity it can add to a future practice sale — all of which we evaluate as part of our initial advisory conversation.