Medical Office Feasibility Study in the Tucson, AZ Metro Area

Physician offices in Pima County

The Tucson, AZ Metro Area has 31 SBA loans to physicians' medical offices across FY2017 to FY2026, for $26.7 million in gross dollars, and all 31 are in Pima County. Medical offices are fourth among 39 classes locally, and in the area-by-area ranking the metro is 47 of 488. The location quotient of 1.79x is the standout figure for the cell, a clear step above the national weight. Median loan size is $313,000, 0.92x the national median, while the middle half starts at $141,500 and reaches $1.1 million. We do not label any of this distinctive.

Programs, brands and holders

Under SBA 7(a) there are 25 loans, under SBA 504 there are 6. Franchise affiliation is 0.00%. Wells Fargo Bank National Association holds 6 loans under 7(a), worth $6.0 million, in SBA's records; the entry is about holdings only.

The one printed year

Only FY2018 stands out of the 31 loans, with 6 loans and $1.7 million printed. The balance of the 31 loans sits in years that fall below the display line, so those blanks are not zeros, and nothing printed shows whether volume has been rising or falling. Pima County's medical offices amount to under 30 loans for FY2017 to FY2021, so the page offers no cancellation or charge-off rate.

Testing a Bakersfield medical office

A middle half that stretches from $141,500 to $1.1 million means the typical project can be a tenant fit-out or a purchased building, which the study must state. It has to test patient volume against the providers on staff, payer mix and collections per provider, the ramp for a new physician, and the build-out cost per square foot. With 504 loans in the mix, a project that buys real estate should be tested for debt service with owner-occupied rent included and for the value of the building as a specialty property apart from the practice. Plans near the top of the range should explain the added size. In Tucson, a loan is placed by its county on the July 2023 list, and one whose county cannot be placed drops out of every metro. The study should also include a downside case in which the first year of collections runs below plan, and show the cash that remains for debt service in that case.