Medical Office Feasibility Study in Kansas

Kansas medical office loans are cancelled at an unusual rate

The standout figure in Kansas is cancellation. At least 25.0% of FY2017 to FY2024 approvals for physician offices were cancelled after approval, and counting loans still undisbursed lifts that ceiling to 29.5%. That clears our distinctness screen against Kansas lending in general and against the class nationally. A borrower in this class should plan for roughly one approval in four failing to fund, and for the possibility that a practice purchase closing date moves or the deal dies.

Size, rank and mix

Across FY2017 to FY2026, 51 loans worth $31.0 million rank Kansas 30 of 53 among states, with the class 11 of 39 inside the state and a location quotient of 0.91x. With a median of $350,000, 1.02x the national figure, and most requests between $100,000 and $767,650, size is typical but leakage is not. Under 7(a) there are 42 loans and under 504 there are 9, while franchise affiliation is 3.9% of loans.

Lenders and counties

Emprise Bank is alone above the five-loan line, with 6 loans worth $930,100, a small average ticket. Johnson County has 22 loans and Sedgwick 17, so those two counties carry most of the file, with Leavenworth at 3 and Douglas and Riley at 2. No charge-off rate is published, since fewer than 30 loans were disbursed in the cohort; that absence is not a zero. Volume has been uneven, from 9 loans and $6.3 million in FY2021 to 1 loan worth $30,000 in FY2025, then 6 loans and $6.8 million in FY2026.

What the study must resolve

Because so many approvals lapse, a Kansas study should list the conditions that must be met before closing: licensing, payer contracts, seller terms for a practice purchase, and the build-out schedule. Demand comes from physician supply, referral patterns and the payer mix. Cost covers tenant improvements and equipment, including imaging or exam-room fixtures where relevant. Coverage needs a conservative ramp for a new provider, and valuation work must split the building from the practice. Brokers and sellers sometimes press for speed, so a documented checklist protects the borrower.