Medical Office Feasibility Study in Oklahoma

Oklahoma physician offices: a Tulsa and Oklahoma City story

Oklahoma physician offices took 69 loans between FY2017 and FY2026, with $27.8 million approved. The state ranks 26 of 53 for physician offices and the class ranks 9 of 39 in Oklahoma, with a location quotient of 1.04x, so the state lends to this class at almost exactly the national rate. Geography is sharply concentrated: Tulsa County has 34 loans and Oklahoma County 21, with Cleveland and Garvin at 3 each and every other county in the top ten at 1 loan. A study outside those two metros is working with almost no local lending history to cite.

Small tickets and local lenders

The median loan is $207,500, only 0.61x the median seen across the nation, and the middle half runs from $108,000 to $459,000. That describes a market of practice purchases, equipment and modest build-outs, not large medical buildings. Of the 69 loans, the program split is 66 under SBA 7(a) and 3 under SBA 504, with no franchised borrower (0.00%). Arvest Bank leads with 16 loans and $3.2 million, BancFirst follows with 8 loans and $3.3 million, and JPMorgan Chase Bank, National Association has 5 loans and $1.4 million. Arvest's count is double BancFirst's but its dollars are lower, which tells a borrower that Arvest handles the smaller deals while BancFirst takes larger ones. A borrower with a larger project should approach the second kind of lender first.

Here the cancellation floor is low: 5.3% for FY2017 to FY2024 approvals, and 7.0% as a ceiling once undisbursed loans are counted. This is one of the stronger completion records among the cells we have seen. The charge-off record is printable because 36 loans are in the cohort: the charge-off floor is 2.8% for Oklahoma's disbursed FY2017 to FY2021 vintages, and it stays 2.8% inside five years. Both are floors. A 2.8% rate on 36 loans reflects a single loss or so, and that is why a lender should not lean on it either way; it shows losses are possible without proving they are common.

What the study must test in Oklahoma

Demand has to be built bottom-up from patient draw, referral relationships and payer mix in the specific metro, since the loan file has nothing on patients. Costs deserve care because a medical build-out costs more per square foot than ordinary office, and a median this small suggests many borrowers lease and improve rather than build. The loan payment should be stress-tested on a realistic ramp for a new practice and on a stress case for a physician's departure. Appraisal work must split bricks from goodwill, because only the real estate secures the lender. Annual volume has stayed steady at 6 loans or so in most years, with a peak of 11 loans in FY2018 and FY2020, so this is a stable but small market.