Medical Office Feasibility Study in Connecticut

Where Connecticut sits among physician-office markets

Connecticut physician offices drew 83 loans in the FY2017 to FY2026 window, with $40.9 million in gross dollars approved. That ranks the state 22 of 53 for physician-office lending, while medical office stands 9 of 39 among all the asset classes financed inside Connecticut. The location quotient of 0.85x tells a lender that the state's share of these loans sits a little below the national share, so this is a steady niche and not a concentration. The median loan of $332,000 is 0.97x of the national median for the class: a Connecticut practice borrows almost exactly what practices borrow elsewhere. The central half of the file spans $100,000 to $611,500, a wide band that blends equipment and fit-out requests with real estate purchases.

Program mix and who holds the loans

Of the 83 loans, 66 are SBA 7(a) and 17 are SBA 504. The 504 side is led by two certified development companies: New England Certified Development Corporation shows 8 loans and $8.2 million, and Community Investment Corporation shows 8 loans and $4.0 million. Equal counts with unequal dollars is a reminder that 504 projects vary in scale, and a buyer of a building needs a different conversation than a tenant finishing leased space. On the 7(a) side, Santander Bank, National Association shows 12 loans and $3.2 million, Liberty Bank 9 loans and $1.1 million, Manufacturers and Traders Trust Company 8 loans and $431,500, and TD Bank, National Association 7 loans and $3.0 million. Each is the present holder of record in SBA's data, and each has at least 5 loans in this cell. The franchise share of 4.8% says nearly every file here is an independent practice, which matters because there is no franchisor underwriting to lean on.

A borrower should read the cancellation figure as a floor: Connecticut cancelled 13.3% of its physician-office approvals made from FY2017 to FY2024, and 15.0% once the still-undisbursed approvals are added in, which marks the ceiling. Either way, a meaningful share of approved physician-office projects never closed into funded loans, often because a lease, a license or a build schedule slipped. For this cell the charge-off rate is held back, since the cohort that has seasoned holds under 30 loans. We print no number for it, and the absence should not be read as zero or as comfort.

Questions a Connecticut study must answer

Work on a physician office here should begin with demand: patient draw within the Capitol area, which shows 21 loans, Western CT with 14 and South Central CT with 10, is where lenders have actually been active. Next comes cost, since medical build-out carries plumbing, imaging shielding and technology that a plain office does not. Debt service coverage must be tested against payer mix and ramp-up of a new practice, not against a mature practice's collections. The appraisal then has to separate real estate value from the improvements only a clinician would use. The yearly record, from 14 loans and $9.1 million in FY2021 to 11 loans and $11.1 million in FY2025, shows lending that is lumpy, so one large project can move a year.