Tenant Improvements in Medical Spaces

As the demand for high-quality healthcare services continues to spike, it is critical to create a medical environment that supports patient needs and responds to technological advances. Understanding what tenant improvements are and how they can help improve medical spaces is important for navigating the healthcare sector of commercial real estate. This article will explore tenant improvements and how our team at Dolfin is pioneering a new way to finance them, helping healthcare firms fund the development of modern, technologically advanced spaces.

What Are Tenant Improvements?

Tenant improvements, often referred to as TI or TIs, are alterations, repairs, or renovations made to a commercial property to suit the tenant’s needs. These improvements can be commissioned by either the landlord or the tenant, though the ultimate goal is the same – to create a space where the tenant and their business can thrive.

TIs are important to both tenants and landlords because they enhance the value and functionality of commercial properties. For tenants, these improvements can help create a customized environment that increases productivity, employee satisfaction, and that promotes the culture of the organization. For landlords, offering these improvements increases the property’s appeal to tenants, often leading to longer lease commitments and reduced vacancy rates. By investing in TIs, tenants create a space that supports their business growth, while landlords enjoy a more marketable property with potentially higher rental returns.

Why Are Tenant Improvements Important For Health Systems?

Modern healthcare moves fast, continuously advancing with the latest research, regulatory requirements, and emerging technologies. Medical practices must keep pace or risk becoming obsolete. Making improvements throughout the office space, such as those described below, are key to improved patient outcomes, practice efficiencies, and an overall better work environment

Customized Patient Care: Medical facilities require specialized layouts and equipment to provide the best care. TIs enable the design of treatment rooms, patient flow areas, and diagnostic spaces tailored to the practice’s needs, improving both patient comfort and efficiency.

Compliance with Healthcare Standards: Healthcare facilities must adhere to strict health and safety regulations, such as those set by HIPAA or OSHA. TIs can be used to bring a space up to code, addressing concerns such as sanitation, accessibility, and privacy.

Improved Efficiency: Efficient layouts and updated infrastructure are essential for healthcare companies. TIs in medical facilities can include creating efficient layouts that optimize patient flow, reducing wait times and minimizing congestion in high-traffic areas. Upgraded facilities with modern equipment and thoughtfully designed workspaces improve staff productivity by streamlining tasks and enhancing collaboration.

Professional Appearance: A well-designed, modern medical space projects a professional, secure environment. Making improvements to refresh outdated spaces and create a more welcoming and visually appealing environment positively impacts patient perception.

Adaptability for Technological Advancements: Healthcare facilities require specialized technology, from stethoscopes and scales to imaging systems and telemedicine setups. Medical professionals must have the equipment they need to perform their work and advance their practices; TI funds can make that possible.

Increased Practice Value: Incorporating advanced technologies and equipment can enhance the functionality and appearance of a medical space, attracting more patients and increasing the overall value.

Enhancements to every aspect of a medical clinic can make a difference in patient care. From where and how files are stored, to the equipment used, and even the layout – each element offers an opportunity to improve the patient experience. Further, some adjustments may be required by law.

To increase productivity and functionality of healthcare facilities, practices may add patient waiting rooms, physician offices, staff break rooms, ADA compliant restrooms, and equipment. These improvements provide medical spaces with what they need in order to meet both current operational demands and future healthcare challenges.

Case Study: ART Health

Advanced Radiotherapy Technologies (ART Health) develops and manages state-of-the-art radiotherapy cancer centers in partnership with leading medical institutions. Due to the high cost of the ART Health technologies, their imaging equipment is out of reach for many cancer centers. However, by partnering with Dolfin, ART Health was able to secure financing for a new 14k+ square-foot radiotherapy center in Newport Beach, CA, which required both advanced equipment and radiation shielding vaults.

Dolfin provided 100% of the $30M financing ART Health needed for the facility through its innovative financing, which was structured as a fully amortizing, 10-year, credit-based lease, offering the cancer center more effective use of their capital. The new facility will open in early 2025 and serve thousands of patients annually. Dolfin’s unique approach makes TIs in the healthcare industry more accessible, which in many cases will bring life-saving care to more patients.

TIs are fundamental to the success of healthcare facilities like ART Health’s new treatment center. Dolfin’s TI financing platform enables healthcare providers to focus on delivering care without being burdened by upfront costs or restrictive holds on their capital.

For more insights on enhancing your office environment and supporting your workforce without straining your cash reserves, contact Dolfin. We can help you access the funds necessary to create engaging and productive workspaces that help drive your business forward.