Medical office buildings have higher operating costs by design, but not every elevated charge is legitimate. Verify after-hours allocations and campus pass-throughs.
A medical office building (MOB) is purpose-built or converted for healthcare tenants, including physician practices, dental offices, outpatient clinics, and diagnostic labs. These buildings require specialized HVAC, plumbing, and electrical systems to meet healthcare regulations. CAM charges reflect the higher cost of maintaining medical-grade building systems.
Typical Lease
Modified Gross or Triple Net (NNN)
Avg CAM/SF
$10.00 to $20.00
Mgmt Fee %
4% to 6%
Medical office CAM includes higher HVAC and utility costs due to extended operating hours, specialized filtration, and medical waste handling. Some MOBs operate near hospital campuses and share infrastructure costs with the affiliated hospital system. Allocation methods vary between single-tenant and multi-tenant floors.
Medical practices with extended hours may trigger after-hours HVAC charges. If these costs are spread across all tenants instead of billed to the requesting tenant, non-requesting tenants are subsidizing extended operations.
When an MOB sits on a hospital campus, shared infrastructure costs like road maintenance, campus security, or central plant utilities may be passed to MOB tenants without clear allocation methodology.
ADA renovations, fire safety upgrades, and building code compliance improvements are capital expenditures that should be amortized. Landlords may pass the full cost through in a single year as an operating expense.
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$15.00/SF
Average medical office building operating expenses are estimated at $15.00 per square foot [industry estimate]
Source: Revista / BOMA Medical Office Report (2024)
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
