Medical Office Building Shells: What Landlords and Developers Should Plan For

A multi-tenant medical office building is built twice. First comes the shell: the structure, roof, exterior, and site work. Then each tenant finishes out a suite, often years apart and with very different needs. A dermatologist, a physical therapy clinic, and an imaging center can end up side by side. The decisions a landlord or developer makes in the shell decide how easily, and at what cost, each of those suites gets built. This guide covers the choices that matter most when you build a medical shell from the ground up.

Core and shell or warm shell

A core and shell, sometimes called a cold shell, usually includes the structure, roof, exterior walls, storefront glass, the slab, site work, and utilities brought to the building. The tenant's finish-out supplies nearly everything inside. A warm shell goes further. It typically adds insulation on the exterior walls, restrooms, a fire sprinkler system, and heating and cooling equipment ready to be ducted to each suite. Some warm shells also include the ceiling grid and basic lighting.

There is no single definition of either term, and that is where disputes start. The lease work letter should list, item by item, what the landlord delivers and what the tenant builds. Our guide on what to ask before signing a medical lease covers the same question from the tenant's side, and our comparison of second-generation space and shell space explains how tenants weigh the two.

A warm shell costs more up front but leases faster and shortens each tenant's build. A core and shell keeps the first investment lower and gives tenants more freedom, but it leaves more work, and more of the allowance, for every finish-out.

Utilities stubbed to each suite

Health care tenants use more water, sewer, and power than office tenants. The shell should bring each utility to every suite, or at least make it easy to get there.

• Sanitary sewer. A sink in every exam room means drain lines all over the floor plan. Set the building sewer deep enough that a sink at the far corner of any suite can still drain to it, and stub a line into each suite.
• Water. Bring a water line into each suite with a shutoff. Decide early whether tenants share one meter or each gets its own.
• Electric. Size the service for medical loads, not office loads. Plan a meter and a disconnect for each suite, or conduit to reach one, and leave room on the electrical room walls for future tenant panels.
• Fire protection and data. Run the sprinkler main so each suite can tie in, and bring empty conduit from the phone and data entrance to each suite.

Thinking ahead pays off even in a small building. Simply Eyes in Colleyville is a 6,300-square-foot, multi-tenant building we built from the ground up in 2019, with an optometry clinic in one suite and a future restaurant in the other. A grease trap for the restaurant suite was installed during construction, so the next tenant will not have to dig up the site to add one.

Some developers also leave strips of the slab out along the plumbing routes, or plan for tenants to saw-cut the slab for their plumbing. Either way, say so in the marketing package so tenants and their architects know what to expect.

Roof and structure for tenants you have not met

Most single-story medical shells are cooled by rooftop units, often one or more per suite. Exam rooms, procedure rooms, and imaging need more cooling than open office space, so plan roof structure that can carry more and larger units than an office building would. Add roof openings and curbs during the shell, or at least lay out where they will go, so tenants are not cutting new holes in a finished roof.

A few other structural choices are hard to change later:

• Ceiling height. Medical suites carry a lot of ductwork, piping, and sometimes medical gas above the ceiling. Leave enough height between the slab and the structure above for all of it.
• Floor loads. In a two-story building, MRI, CT, and other heavy equipment are easiest on the ground floor. If you want to lease upper floors to imaging tenants, design for the load now.
• Shafts and exhaust. Upper-floor tenants need routes for plumbing vents, exhaust, and future equipment. Reserve shaft space in the core.
• Elevators. In buildings four stories or more above grade, the building code calls for at least one elevator large enough for an ambulance stretcher. Many developers size the elevator that way in shorter buildings too.

Texas Health MOB Allen, a 48,000-square-foot, two-story medical office building we built in 2017, shows the kind of common areas a larger shell includes, with a two-story lobby and an open stair to the second floor.

Site work, parking, and the way in

Medical tenants need more parking than office tenants. Patients come and go all day, and most cities set a higher parking ratio for medical office than for general office. Check the zoning and the city's parking rules before the site plan is drawn, because parking often sets how big the building can be.

Plan the accessible route from parking to every suite entrance, not just the main door. That can mean ramps and railings along the storefronts, as at the Celina Medical Office Building Shell, a single-story building we built with separate storefront entries for each tenant. A covered drop-off is worth considering too. The 26,500-square-foot ground-up shell building we built in Bedford in 2020, the Bedford Medical Plaza, has a drop-off lane under a steel canopy, a covered parking structure, and switchback ramps and stairs on a 3.16-acre site.

Our guides on buying land for a medical office building and site approvals in DFW cities cover the steps before the building permit.

Building the shell and the first suites together

When a tenant signs early, its finish-out can be built along with the shell. That can let the tenant open sooner, but the tenant's design has to keep pace. Its under-slab plumbing, rooftop units, and roof openings need to be set before those parts of the shell are built. Texas Health Professional Building 2, Alliance, a two-story, 65,007-square-foot medical office building in Fort Worth that we built in 2019, was built concurrently with 7,000 square feet of new clinic space for Spine Team Texas and a new two-operating-room spine surgery center.

Keep the permits straight. The shell has its own permit, and each tenant finish-out is a separate project with its own permit, inspections, and certificate of occupancy. Projects above the state's cost threshold also need registration and an accessibility review with the Texas Department of Licensing and Regulation. Our guide to building permits for medical offices in DFW walks through each step.

Bring your contractor in while the shell is still being designed. We prepare a first budget at no charge. It is an early range, and a detailed estimate is priced later from the drawings. Learn more about how we build new buildings from the ground up. Structures and Interiors also finishes out and renovates existing space, including the tenant suites inside a new shell. If you plan to occupy part of the building yourself, see shell and finish-out in one contract.

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