SBA 504 Medical Office Feasibility Study in Florida

Cancellation on the Florida 504 record

Florida physician offices financed through SBA 504 number 198 loans worth $164.2 million for FY2017 to FY2026, which is ten full fiscal years of approvals. Cancellation is the figure to read first: it reached 23.9% at a minimum for FY2017 to FY2024 approvals, and 29.7% if undisbursed loans are counted, so between roughly a quarter and three in ten approvals did not go ahead as funded loans. The data does not say why any single approval lapsed, and a study should ask whether financing, closing and construction are ready before it relies on an approval.

Size and standing

The median loan of $584,500 comes to 0.87x of what physician offices borrow nationally under 504, and the central half runs from $341,500 to $895,750. Florida is 2 among states for 504 loans in this class, and physician offices hold 4 of 39 within Florida. No loan is franchised.

Development companies

The leader is Florida Business Development Corporation (95 loans, $87.9 million); Florida First Capital Finance Corporation, Inc. is near it with 85 loans and $65.5 million. Sunshine State Economic Development Corporation has 17 loans and $10.6 million. Each loan appears under the company that currently holds it in SBA's file, which makes the table a map of where the program has operated and not a forecast. Miami-Dade County has 39 loans, Hillsborough 24, Orange 15, Broward 14 and Seminole 12.

Charge-offs

Among the 73 loans that funded across FY2017 to FY2021, no charge-off appears, and the five-year measure prints 0.00% too. The cohort is small and loans still open can yet fail, so a reader should take this as a floor and no proof that physician office loans cannot lose.

Years

Approvals climbed from 10 in FY2017 to 37 in FY2021 with $26.8 million, eased to 16 in FY2024 and rose to 25 loans and $22.8 million in FY2026.

Testing a Florida medical office

A study should test the physician demand within the trade area, the payer mix, the number of exam rooms the building can hold, and the practice's ability to carry a mortgage-like payment. For a building purchase it should show the price against comparable sales and how much of the space the sponsor will occupy. Given the attrition on file, the study should document that financing, zoning and construction are ready, and an appraiser can be asked what a medical fit-out does to value should the first tenant leave.