Medical office space in the DMV follows the hospitals and the rooftops. Clusters sit around MedStar Washington Hospital Center, GW, Howard, and Sibley in DC; Suburban Hospital and Holy Cross in Bethesda and Silver Spring; UM Capital Region Medical Center in Largo; and Inova Fairfax in Northern Virginia. Around each one you find three kinds of borrowers: practices buying their own space, investors buying multi-tenant medical buildings, and operators adding equipment or new suites.
This guide covers each path for 2026, with cost and rent bands and three worked examples. National product detail is on SBA medical and dental practice loans, dental office renovation financing, financing medical office buildings for investors, and bridge loans for medical office acquisitions.
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Which loan fits your situation
| You are | Need | Best-fit product | Who provides it |
|---|---|---|---|
| Practice owner | Buy your suite or building | Owner-occupied bridge, then SBA 504 or 7(a) | Jaken Finance Group (bridge); SBA lenders (permanent) |
| Practice owner | Build out a new location | SBA 7(a), landlord allowance | SBA lenders |
| Practice owner | Chairs, imaging, lasers | Equipment financing at 6%–14% | Jaken Finance Group |
| Practice buyer | Acquire an existing practice | SBA 7(a) or acquisition bridge | SBA lenders; capital partners we arrange |
| Investor | Buy a multi-tenant medical building | Bridge at 8.99%–13.5%, then DSCR or commercial permanent | Jaken Finance Group |
| Investor | Buy a single-tenant medical net lease | DSCR on qualifying property | Jaken Finance Group — see DSCR on medical net lease |
2026 DMV medical office bands (planning)
| Submarket | Asking rent (NNN, per sf per year) | Medical condo price per sf | Notes |
|---|---|---|---|
| DC — Foggy Bottom, Upper NW, near Washington Hospital Center | $38–$55 | $550–$800 | Limited supply, older buildings |
| Bethesda / Chevy Chase | $40–$55 | $550–$750 | Strong specialist demand |
| Rockville / Gaithersburg / Silver Spring | $30–$42 | $380–$550 | Large medical condo inventory |
| Prince George’s — Largo, Bowie, Lanham | $26–$36 | $300–$450 | Growth around the regional medical center |
| Fairfax / Tysons / Reston | $32–$46 | $400–$600 | Inova-anchored demand |
| Loudoun / Prince William | $28–$38 | $350–$500 | New construction near new rooftops |
| Build-out type | Cost per sf (planning) |
|---|---|
| Reuse second-generation medical | $60–$140 |
| General medical, first generation | $180–$350 |
| Dental suite | $250–$450 |
| Imaging or procedure space | $350–$600+ |
These are planning ranges from market observation. Get a contractor bid and equipment specs before you size a loan.
Rules that shape medical real estate in the DMV
- Certificate of need. DC reviews certain health facilities and services through its State Health Planning and Development Agency at DC Health. Maryland uses the Maryland Health Care Commission. Virginia uses its certificate of public need program through the Virginia Department of Health. Surgery centers and some imaging services are the usual triggers.
- Physician-owned buildings. Leases between physician owners and providers who refer to them generally need fair-market rent and written terms under federal fraud and abuse rules. The HHS Office of Inspector General publishes guidance.
- Building permits. Medical suites need specific plumbing, ventilation, and accessibility. In DC, permits and occupancy run through the Department of Buildings.
Worked example — Bethesda dental practice buys its condo suite
Composite, not a live quote. A three-dentist practice leases a 2,400-square-foot suite in a Bethesda medical condo building. The unit owner offers to sell.
| Line | Amount |
|---|---|
| Purchase price (2,400 sf × $600) | $1,440,000 |
| Maryland and Montgomery County transfer, recordation, and closing | ~$48,000 |
| Bridge at 75% of price | $1,080,000 at 10.25% interest-only |
| Monthly bridge interest | ~$9,225 |
| Condo fees and taxes | ~$2,450/month |
| Monthly owning cost on bridge | ~$11,675 |
| Current rent plus NNN charges | ~$11,200/month |
Owning costs about the same as renting during the bridge period. At month 9, the practice refinances into SBA 504. With a long fixed rate on the larger share of the debt, monthly principal and interest on roughly $1.3 million lands near $9,000, plus condo fees and taxes. That is close to the bridge interest, but part of every payment now pays down principal. The practice builds equity instead of paying rent. See SBA 504 loans and owner-occupied commercial loans.
Worked example — investor buys a Largo medical building with a vacant suite
Composite. An 18,000-square-foot, three-story medical office building near the regional medical center in Largo. It is 83% leased, with a 3,000-square-foot suite empty.
| Line | Amount |
|---|---|
| Purchase price | $6,200,000 |
| Bridge at 70% of price | $4,340,000 at 10.5% interest-only |
| Tenant improvement holdback (3,000 sf × $85) | $255,000 |
| Leasing commissions reserve | $45,000 |
| Monthly bridge interest (on full commitment, illustrative) | ~$40,600 |
| In-place NOI | ~$410,000 per year |
Stabilized (month 14): the vacant suite leases to a physical therapy group at $30 per square foot NNN.
| Line | Annual |
|---|---|
| Rent (18,000 sf × $30, 95% economic occupancy) | $513,000 |
| Non-reimbursed expenses and reserves | $30,000 |
| Net operating income | $483,000 |
| Value at a 7.25% cap rate | ~$6,660,000 |
| Permanent loan at 65% of value | ~$4,330,000 |
| Debt service at 7.0%, 25-year amortization | ~$367,000 |
| DSCR | ~1.32 |
The permanent loan retires the bridge. The sponsor’s gain comes from leasing the vacant suite. If the suite takes 24 months to lease instead of 14, interest carry grows by about $400,000. That is why tenant improvement and interest reserves belong in the loan from day one.
Worked example — Fairfax imaging center adds an MRI
Composite. An outpatient imaging group adds a $1.1 million MRI, plus $240,000 of shielding and electrical work in its existing suite.
| Line | Amount |
|---|---|
| Equipment financing, 7 years, 8.5% illustrative | $1,100,000 |
| Monthly payment | ~$17,420 |
| Suite work (paid in cash or with a separate term loan) | $240,000 |
| Annual payment on equipment | ~$209,000 |
The new MRI needs to produce at least $210,000 a year in net collections after staffing, service contracts, and supplies. Check whether the added service needs Virginia certificate of public need approval before ordering the machine. See equipment financing.
Planning table — owning vs. leasing for a practice
| Factor | Lease | Own with bridge then SBA |
|---|---|---|
| Upfront cash | Deposit, build-out share | 10%–25% of price plus closing |
| Monthly cost | Rent plus NNN, rising each year | Fixed debt service plus fees and taxes |
| Build-out control | Landlord approval | Yours |
| Equity | None | Builds over time |
| Exit | Move at lease end | Sell or lease to your successor |
Tenant improvement budget — the gap a leasing practice funds
Leasing does not mean the landlord pays for your suite. Here is a composite 3,000-square-foot primary care suite in a Rockville office building that has never held medical use.
| Line | Amount |
|---|---|
| First-generation medical build-out (3,000 sf × $220) | $660,000 |
| Landlord tenant improvement allowance ($60/sf) | $180,000 |
| Gap the practice funds | $480,000 |
| Gap financed over 7 years at 9% (illustrative) | ~$7,720/month |
That payment sits on top of rent. One fix is to ask the landlord for a larger allowance in exchange for higher rent. An extra $40 per square foot, or $120,000, repaid over a 10-year lease at 8% adds about $5.80 per square foot per year to rent. That is roughly $1,460 a month. It moves cost from your balance sheet to the lease. But under most leases you pay it for all ten years, even if you leave the suite early.
If the building is for sale, compare that gap to the owner-occupied path above. When you own, the build-out adds value to your own asset.
Budget for accessible equipment. Practices that take Medicare or Medicaid funding generally fall under HHS rules for accessible medical diagnostic equipment. By July 8, 2026, covered practices that use exam tables or weight scales had to have at least one accessible unit of each. New purchases must meet the accessibility standards until about 10% of each equipment type is accessible, or 20% for practices that focus on mobility conditions. See 45 CFR Part 84, Subpart J. Put that equipment in your build-out and financing budget, and plan room size and door clearance around it.
Local risk section
- Old buildings in DC may need costly HVAC, elevator, or accessibility upgrades before medical use.
- Medical condo associations can limit uses, signage, and hours. Read the documents before you buy.
- Reimbursement changes affect practice income. Lenders underwrite on recent collections, not projections.
- Transfer and recordation costs are high in DC and Montgomery County. DC charges higher rates on commercial purchases of $2 million or more. See the DC recordation guide.
- Hospital system moves can shift demand. A new outpatient campus nearby can pull tenants from older buildings.
Documents to prepare
- Two to three years of practice tax returns and year-to-date profit and loss
- Collections report by payer type
- Current lease or purchase contract, and condo documents if applicable
- Build-out budget and equipment quotes
- For investors: rent roll, leases, operating statements, and tenant improvement plan
- Personal financial statement for each owner
Related guides
- SBA medical and dental practice loans
- Dental office renovation financing
- Business acquisition financing DMV
- Commercial lending Washington DC
- Self-storage loans DMV
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Jaken Finance Group originates real estate and equipment loans and arranges certain business-credit products through capital partners. SBA loans are made by SBA-approved lenders under current program rules. Rates and terms are offered only to qualified borrowers, quoted per file, and subject to change. Composite examples are illustrations, not offers. This page is not legal or healthcare compliance advice.