Office Space Planning and Design for Medical
Practices, Part 4: Development Issues
Richard C. Haines, Jr.*
T
he decision to build anew or remodel/add-on to your existing
facility has been a tough one. After that decision was reached,
the implementation of design and construction presented many
difficult hurdles on the road to achieving a functional office
space in a cost-effective manner.
This article will continue to explore just how a practice pro-
ceeds with some of the further details of the implementation
process.
Key words: Medical practice facilities; building new medical practice facilities;
remodeling medical practice facilities; planning medical practice facilities.
Editor's Note: In this issue, we present the last of four articles that describe the process of evaluating space needs, plan-
ning and construction for medical offices (see Volume 18: Page 244249; Volume 18: Page 299303; Volume 19: Page
1926). While some readers may not currently be contemplating remodeling or new construction for their practices, we
believe the points described will be of value for understanding the intricacies of the process. (Parenthetically, they are use-
ful as a background even for home improvements!)
INTRODUCTION
This may also be the opportunity to renegotiate a more fa-
vorable rate in the current lowinterest rate environment.
In the final article of this series, a few concepts that
If you are building a new building, you will need a
will surround your development need to be discussed.
mortgage loan on the entire project. There are two types of
This includes deciding how to finance and construct your
loans that are typically done when you develop real estate.
project. Reviewing the Flow Chart that has been part of
each article, we are now at the end of the decision-making
Mortgage Loan
tree (Fig. 1).
The first loan is the mortgage on your property,
sometimes referred to as the take-out loan. This is the
FINANCING
loan that you pay off over time (10, 15, or 20 years per-
haps) as you occupy and use your building. Your local
If you are merely remodeling your existing space,
banker can discuss with you all the various types of mort-
chances are that you will go to your local commercial bank
gage loans that exist, including fixed rate, adjustable rate,
and secure a loan to have the work performed. This loan
and fixed rate with a balloon payment.
may well be outside the mortgage you already have on
the property and will just be an improvement loan.
Construction Loan
However, if you are doing major renovation and new ad-
For many projects, the money from the mortgage
ditions to your building, it may be in your interest to ac-
loan is not released until the project is actually constructed,
quire a new mortgage on the entire completed project.
has been inspected by the lending authority, and has been
determined that the mortgage loan is ready to be closed.
Although this is the lending institution's requirement, it
*Senior Medical Planning Consultants, Medical Design International,
2100 East Exchange Place, Suite 400, Tucker, GA 30084; telephone:
does not necessarily meet the cash flow expectations of
7709397950; fax: 7709397522; E-mail: haines@mdiatlanta.com.
Copyright 2003 by Greenbranch Publishing LLC.
the contractors, subcontractors, and materials groups who
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