Sell your medical office
On-campus or off, leased to a health system or a three-physician practice, with a dental suite nobody else can use. We buy it.
Medical Office at a glance
- Typical deal size
- $1.5M – $20M
- Lease structure
- NNN or modified gross
- Typical term
- 5–15 years
- Escalations
- 2–3% annually
Overview
What medical offices are really worth
Our read
Medical office is the office subtype that did not break. While general office absorbed a structural shift to remote work, medical held occupancy for a simple reason: nobody gets a filling over video.
What makes the asset class distinctive is the fit-out. A dental or imaging suite carries hundreds of thousands of dollars of tenant-specific infrastructure — plumbing in the slab, medical gas, lead shielding, reinforced floors. That investment is why practices stay for fifteen and twenty years, and it is why retention here runs far above any other office product.
It is also the risk. The same infrastructure that keeps a dentist in place makes the suite nearly unusable to anyone who is not a dentist. Medical office is a high-retention, low-flexibility asset, and both halves of that sentence have to be underwritten.
The newer variable is consolidation. Health systems and private equity platforms have been acquiring independent practices at pace, and when they do, the real estate decision moves to someone with no relationship to the building.
Valuation
How we underwrite it
The method
We start with who signed the lease rather than whose name is on the door. A suite operating under a health system brand may be leased by an independent LLC, and the credit difference is substantial.
From there we weigh tenure and fit-out depth against nominal lease term, because in medical office they frequently tell opposite stories. A practice with three years left on paper but fifteen years and a purpose-built suite behind it is a lower-risk income stream than the lease implies. We underwrite realistic renewal probability, not just remaining term.
Backfill assumptions get specific. We look at how many same-specialty practices operate within a realistic radius, because that is the actual pool for the suite. A generic exam-room suite backfills broadly; an imaging suite with shielding does not.
Capital items — elevator, HVAC, roof, ADA compliance — are priced up front. Medical buildings tend to carry deferred capital because owners defer around occupied suites they do not want to disturb.
What moves the number
- 01On-campus versus off-campus location, which drives both referral flow and the lender's view of the asset
- 02Health system affiliation, and specifically whether the lease is signed by the system or by an independent practice
- 03Practice tenure in the suite — a dentist twelve years into a location with buried plumbing and lead-lined walls is not moving
- 04Tenant improvement investment already in place, since medical fit-out runs multiples of general office
- 05Parking ratio, which drives patient volume more directly than in any other office subtype
- 06Consolidation exposure — a practice acquired by a hospital system or PE platform may be relocated on renewal
Capital markets today
- 10-yr Treasury
- 5.24%
- 4.12% a year ago
- SOFR
- 3.87%
- 4.2% a year ago
- 30-yr mortgage
- 7.28%
- 6.3% a year ago
- CRE loan delinquency
- 1.53%
- 1.57% a year ago
- CRE prices, YoY
- 6.58%
- -2.7% a year ago
Sources: FRED DGS10, 2026-10-01 · FRED SOFR, 2026-10-01 · FRED MORTGAGE30US, 2026-10-01 · FRED DRCRELEXFACBS, 2026-04-01 · FRED COMREPUSQ159N, 2026-01-01
Diligence
What a buyer actually looks at in a medical office
- Check 01
Lease abstracts and who actually signed
A lease signed by a health system is a different credit from one signed by a three-physician LLC operating under that system's brand. The signage rarely tells you which.
- Check 02
Tenant improvement history and remaining obligations
Medical fit-out is expensive and often landlord-funded. Unamortized TI and future obligations on renewal are real liabilities that do not appear on a rent roll.
- Check 03
Parking count against local medical requirements
Medical use carries higher parking requirements than general office. A building that is legal today may be non-conforming if the use intensifies.
- Check 04
Specialty infrastructure — plumbing, gas, shielding, power
Dental plumbing, medical gas lines, and lead shielding for imaging are what make the tenant sticky. They are also what make the suite hard to backfill to a non-medical user.
- Check 05
ADA compliance and elevator condition
Patient populations make accessibility non-negotiable, and a non-compliant building faces both capital cost and liability exposure.
- Check 06
Health system affiliation agreements
Referral arrangements and any Stark or anti-kickback considerations around rent can affect whether in-place rent is sustainable at renewal.
Backfill risk
What happens if the tenant leaves
The tenant-goes-dark scenario
Medical office has the best tenant retention of any office subtype and the worst backfill flexibility. Both facts come from the same source: the fit-out.
A dental suite has plumbing in the slab, a dedicated compressor, and cabinetry built for the operatories. An imaging suite has shielding and reinforced floors. That investment is why practices renew for decades rather than shopping the market — the cost of moving is not the rent differential, it is rebuilding the suite. Retention in a well-located medical building routinely runs far above general office.
The flip side is that when a medical tenant does leave, the suite backfills to another practice of roughly the same specialty or it backfills to nothing. Converting a dental suite to general office means demolishing exactly the infrastructure that made it valuable. Underwriting downtime on a medical suite means underwriting how deep the local pool of same-specialty practices actually is.
The risk that has grown recently is consolidation. When a hospital system or a private equity platform acquires a practice, the real estate decision moves to someone with no attachment to the building.
Why this matters to you
Every buyer prices the tenant-goes-dark scenario, whether or not they say so out loud. It is the largest hidden input into the cap rate you get offered.
Understanding it before you go to market is the difference between negotiating and being negotiated with.
Who sells to us
Situations we see most often
- Physician-owner retiring and selling the building separately from the practice
- Practice acquired by a hospital system that intends to relocate staff to campus
- Partnership of doctors who bought the building together and no longer agree on holding it
- Owner facing a large TI obligation on renewal they do not want to fund
- Aging building with an elevator or HVAC replacement due
Buy box
What we buy
- 01On- and off-campus medical office, $1.5M to $20M
- 02Single-tenant and multi-tenant
- 03Practices, health systems, and PE-backed platforms
- 04Buildings with deferred elevator or HVAC capital
Process
How selling to Dizposition works
Day 0
01Send us the property
Address, asset type, and the lease if there is one. That is enough for us to start.
- 02
We underwrite it
Our underwriting runs the income against current market pricing and the cost of capital. No lowball anchor.
10 minutes
03You get a firm offer
In 10 minutes, with the math shown. You will know exactly how we got there.
As fast as 30 days
04Close on your timeline
As fast as 30 days, or as slow as you need. We are the principal, so the date is yours.
FAQ
Selling a medical office
My tenant is a single physician practice, not a hospital system. Does that hurt?
It widens the cap rate because the credit is a small business rather than a system balance sheet. It does not make the building hard to sell. Practice tenure and the depth of fit-out often matter more than the credit — a practice fifteen years into a purpose-built suite is genuinely unlikely to leave.
The practice in my building just got acquired. Should I sell now?
It is worth moving before the renewal decision rather than after. Once a system or platform owns the practice, the real estate decision belongs to someone with no history in the building. Tell us where the lease sits and we will underwrite it honestly.
I own the building and the practice. Can I sell just the real estate?
Yes — a sale-leaseback is common here and often the cleanest outcome. You take the capital out of the building and keep practicing on a long-term lease.
My building needs a new elevator. Does that stop a sale?
No. It is a priced capital item. Tell us up front and it goes into the first number rather than becoming a retrade in week three.
How long does it take to sell a commercial property to Dizposition?
You get a firm written offer within 10 minutes of sending us the property. If you accept, you can close in as little as 30 days — most of that is title work and your own timeline. There is no listing period, no marketing, and no waiting on a buyer's financing contingency.
Can I sell my property as-is?
Yes. We are the buyer, so there is no lender requiring repairs and no inspection contingency to renegotiate against you. Deferred maintenance, a failing roof, an aging tank system — we price it into the offer rather than asking you to fix it first.
Can I sell with a tenant in place?
Yes, and in most cases a tenant makes the property more valuable to us, not less. We will ask for the lease, a rent roll, and any estoppel certificates. You do not need to deliver the property vacant.
What if my lease is short-term or about to expire?
Short remaining term is one of the main reasons owners come to us. A conventional buyer needs lease term to get financing, which is why short-dated assets sit on the market. We underwrite the real estate and the backfill prospects rather than the remaining term alone.
What if the property is vacant?
We buy vacant assets. Pricing shifts from an income approach to what the building and land are worth to the next user, which is a different calculation — but it is one we do routinely rather than one that disqualifies the property.
Do I need a broker to sell to you?
No. We buy directly, and there is no commission because there is nothing to market. If you already have a broker, we will pay them. Selling without one saves the commission, but you should understand you are also giving up price discovery — a broker's job is to find out whether someone will pay more than we will.
What documents do I need to get an offer?
The address and the lease are enough to start. To finalize, we will want the rent roll, the last two years of operating statements, the title commitment, any existing survey, and any environmental reports you already have. You do not need an appraisal or a broker package.
How do you determine your offer?
We underwrite in-place income against what the space would re-lease for, adjust for capital needs and any environmental tail, and apply a cap rate supported by comparable transactions. We show you the inputs. If you disagree with an assumption, we would rather argue about the assumption than about the number.
What are typical seller closing costs?
Title and escrow fees, any transfer or recording tax owed in your state, prorated property taxes, and payoff of any existing debt. Because we are the buyer, there is no commission and no marketing cost. Transfer tax varies significantly by state and is often the largest single line.
Will I owe capital gains tax when I sell?
Usually yes, on the gain above your adjusted basis, and depreciation recapture is taxed separately from appreciation. State treatment varies. This is a question for your CPA before you sign, not after — the structure of the sale can change the answer.
Can I do a 1031 exchange?
Yes. A 1031 exchange lets you defer federal capital gains by reinvesting in like-kind property, subject to a 45-day identification window and a 180-day closing window from the date you sell. You must have a qualified intermediary in place before closing — it cannot be arranged afterward. Most states conform to federal treatment, but a few do not.
Can I sell if I am behind on payments or facing foreclosure?
Yes, and speed is the reason to move early rather than late. We can close on a defined date, which is what a lender or a receiver generally needs to see. Send us the payoff figure and any notices you have received.
Can I sell a property I inherited or that is in probate?
Yes. Probate sales take longer because the court timeline governs, not ours, and multiple heirs need to agree on the price before anything can close. We are used to working around both. Inherited property also generally receives a stepped-up basis, which can change the tax math substantially.
What if there is environmental contamination?
Send it anyway. Environmental history is one of the most common reasons a conventional sale falls apart, and it is one of the reasons owners call us. We price the remediation and the residual liability into the offer rather than walking away at the Phase II.
Is there any cost or obligation to get an offer?
None. There is no fee, no listing agreement, and no obligation to accept. If our number does not work for you, you keep the underwriting we showed you and we part ways.
Markets
Top markets we buy medical offices in
Where the inventory is
218,066 U.S. establishments · Offices of physicians
- 01Sell a medical office in California31,778
- 02Sell a medical office in Texas22,601
- 03Sell a medical office in Florida21,322
- 04Sell a medical office in New York13,386
- 05Sell a medical office in Pennsylvania8,257
- 06Sell a medical office in New Jersey7,756
- 07Sell a medical office in Georgia7,590
- 08Sell a medical office in Illinois7,503
- 09Sell a medical office in Michigan6,747
- 10Sell a medical office in Ohio5,838
Sources: U.S. Census Bureau, County Business Patterns, NAICS 6211, 2023
Browse by state
50 state markets
- Arizona
- Texas
- Florida
- Alabama
- Alaska
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
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10-minute offer
Ready to sell your medical office?
Send us the property and the lease. You'll have a firm offer, with the math shown, in 10 minutes.


