Radiation oncology space converts to general medical and the math changes in ways the rent roll hides.
A linear accelerator vault has two-foot concrete walls, a reinforced slab, and a mechanical infrastructure that costs north of a million dollars to build out. When that tenant leaves, the landlord faces a choice: spend to demise and rebuild at something close to original cost, or market the vault as-is to another radiation oncology group and accept that the pool of replacement tenants fits in a small room. Standard MOB underwriting models a TI allowance and a reasonable re-leasing period. Neither assumption holds here because the demolition alone, before a single dollar of new TI, can run forty to sixty dollars a foot on a suite that was already high-cost to build. What was the premium rent the radiation oncology tenant paid, and did the cap rate at acquisition actually reflect what it would cost to get out of that box if the tenant ever left? Most deals I see underwrote the income and skipped the exit. The suite that commands the highest rent in the building sometimes deserves the lowest residual value in the NAV model, and the spread between those two numbers is exactly what a buyer needs to quantify before the letter of intent, not after the estoppel. What is the actual square footage of the vault relative to the total building, because that ratio changes whether this is a manageable single-suite risk or something that reprices the whole asset?
