How New City Financial underwrites medical office financing
Medical office is one of the more resilient corners of commercial real estate, and New City Financial underwrites it on the building's own cash flow rather than your personal tax returns. We start with the property's net operating income and its debt-service coverage ratio (DSCR), so a physician group, a dental partnership, or an LLC that owns a medical office building can qualify on the strength of its rent roll instead of years of income documentation. Deals that clear a 1.0 DSCR or better, backed by credible in-place or projected rents from healthcare tenants, sit squarely in our wheelhouse.
On terms, we lend up to 75% of value on loan amounts from $75,000 to $50 million, with a 500 FICO floor and closings in under three weeks when title and third-party reports move on schedule. Fixed-rate structures over 3, 8, and 30 years — with no balloon payments — give owners a stable debt cost to plan capital and re-tenanting budgets around. Any rates referenced on this site are illustrative and depend on the asset, the market, your leverage, and sponsor experience.
Medical office deals we finance
We finance a wide range of medical office assets: multi-tenant medical office buildings anchored by outpatient clinics, single-tenant properties leased to a dental, imaging, physical-therapy, or specialty practice, ambulatory and urgent-care facilities, and general office space being converted to medical use. Common business plans include straight acquisition, value-add repositioning — buying an under-leased or dated building, upgrading exam-room infrastructure and common areas, and re-tenanting to lift NOI — rate-and-term refinance to replace a maturing or higher-cost loan, and cash-out refinance to free equity for the next acquisition or a tenant-improvement budget.
Owner-occupied medical office is fully eligible: when your practice occupies the building it owns, that is a business-purpose loan and a natural fit for our program. Because every loan we make is business-purpose, we work with investors and healthcare business owners rather than consumer homebuyers, and we do not finance primary residences. If a specific building is on your radar, the fastest path is a short conversation about the rent roll, the in-place NOI, and your plan for the asset.
What makes medical office distinct to underwrite
What sets medical office apart in underwriting is the tenancy. Healthcare practices invest heavily in specialized build-out — plumbing, exam rooms, imaging shielding, and code requirements that are expensive to reproduce elsewhere — which makes them unusually reluctant to relocate and tends to support longer lease terms and steady renewals. That stickiness translates into the durable, predictable income our DSCR-based approach is built to reward.
Location matters too: proximity to a hospital campus, referral networks, and patient access can strengthen a building’s tenant demand, while off-campus properties in growing suburban markets serve the ongoing shift of care into outpatient settings. We weigh each of these factors — tenant mix and credit, lease structure, use, and market position — alongside the numbers to size a loan that fits both the property and the business plan behind it.
