Inside Medical Real Estate: What I’m Learning from a Surgery Center Transaction
Commercial real estate in the medical industry isn’t just about finding the right space—it’s about understanding the highly regulated, complex needs of healthcare providers. As I work on a transaction involving a surgery center, I’m gaining firsthand knowledge of the unique challenges that come with this type of commercial property—and I want to share some of those insights here.
From Certificate of Need (CON) requirements to operating room specs and what different types of surgeons look for in a facility, here's what you need to know if you're considering investing in or developing medical space.
What Is a Certificate of Need (CON)?
A Certificate of Need (CON) is a legal document that some states require before new healthcare facilities—like surgery centers—can be built, expanded, or renovated. The goal of the CON program is to prevent oversaturation in certain markets and control healthcare costs by ensuring that any new medical development is necessary and won’t negatively impact existing providers.
How Long Does It Take to Get a CON?
The timeline for securing a CON can range anywhere from 6 to 18 months, depending on the state and the scope of the project. In states like Illinois (which does require a CON), the process can be lengthy and involves:
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Submitting detailed financial and operational projections
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Public hearings and community input
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Possible challenges from competitors
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Review and approval by a state board
How Expensive Is It?
CON applications can cost tens of thousands of dollars in legal and consulting fees before a single shovel hits the ground. You’ll need architects, healthcare consultants, attorneys, and financial analysts to complete the required documentation—and that’s all before you start construction or improvements.
Can You Work Around a CON?
While CON laws are strict, there are some strategies developers and healthcare providers use to avoid or minimize CON requirements:
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Partnering with an existing licensed provider: If you team up with a hospital or facility that already has a CON, you may be able to operate under their license.
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Leasing existing space: Purchasing or leasing a facility that was already approved under a CON may allow you to avoid a new application.
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Size or procedure limitations: Some states have thresholds—if your center is under a certain square footage or only offers limited outpatient services, you may not trigger CON requirements.
Important: Always consult legal experts in healthcare compliance before moving forward. Attempting to “skirt” CON laws without proper guidance can lead to major setbacks.
What Surgeons Are Looking for in a Surgery Center
Surgeons, especially those investing in or partnering with surgery centers, have very specific criteria:
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Efficient layouts for quick patient turnaround
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Private recovery rooms to enhance patient experience
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State-of-the-art equipment compatibility
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Ease of scheduling and minimal hospital bureaucracy
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Ownership opportunities that let them share in profits
For real estate agents, understanding these priorities helps guide negotiations and design decisions. It’s not just about square footage—it’s about workflow and revenue potential.
Why Spine Surgeons Need More OR Space
When working with spine surgeons, you’ll find they often require larger operating rooms than other specialists. Here’s why:
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More equipment: Spine surgery involves advanced imaging (like C-arms or O-arms), surgical microscopes, and multiple trays of instruments.
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Larger surgical teams: These procedures often require a full surgical team including assistants, anesthesiologists, and sometimes techs running real-time imaging.
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Patient positioning: Spine procedures can involve complex positioning systems that take up space on all sides of the table.
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Higher volume of implants and tools: Shelving and staging areas must accommodate implants, hardware, and surgical navigation systems.
Designing a facility for spine surgery? Plan for ORs that are at least 650–750 sq. ft. or larger, compared to the standard 400–500 sq. ft. used in many outpatient centers.
What Pain Management and Orthopedic Surgeons Look for in a Surgery Center
In addition to spine surgeons, pain management doctors and orthopedic specialists—such as those treating knees, shoulders, hips, and elbows—are increasingly performing procedures in outpatient surgery centers. These specialists have their own distinct needs when evaluating or designing surgical facilities:
1. Access to Advanced Imaging On-Site
Pain doctors and orthopedic surgeons often rely heavily on fluoroscopy, ultrasound, and MRI for precision-guided injections and minimally invasive procedures. Many prefer surgery centers with on-site imaging capabilities to streamline diagnostics and reduce delays in care.
2. Efficient Pre-Op and Post-Op Flow
Since many of their procedures are minimally invasive and can be performed on a same-day basis, these doctors value centers with fast and efficient patient flow. This includes:
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Streamlined check-in
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Clear recovery protocols
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Well-trained post-anesthesia care unit (PACU) teams
3. Specialized Equipment for Joint Procedures
Surgeons performing arthroscopies or joint replacements need rooms with arthroscopy towers, high-resolution video systems, and adequate space for sterile equipment setup. This equipment often includes motorized shavers, pumps, and irrigation systems—requiring proper storage and plug-and-play compatibility.
4. Room for In-Procedure Adjustments
Procedures like injections, nerve ablations, and endoscopic repairs may require flexible lighting, adjustable tables, and easy access to imaging monitors. These specialists want procedure rooms that support mobility and adaptability during live adjustments.
5. Patient Comfort and Reputation
Because orthopedic and pain procedures are often elective or semi-elective, patients choose where they go—and doctors want to work in facilities that support a first-class patient experience. That includes:
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Clean, modern waiting areas
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Private recovery bays
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Convenient parking and access
6. Long-Term Control or Ownership
Like spine surgeons, many orthopedic and pain specialists are looking for ownership stakes in the surgery centers they use. This gives them more control over schedules, staffing, and profitability.
Final Thoughts: The Medical Market Is a Niche with Serious Opportunity
Working on this surgery center deal has opened my eyes to the complexity—and opportunity—within medical commercial real estate. If you're an investor, developer, or healthcare professional, this space offers strong demand, long-term tenants, and resilient performance—even in uncertain markets.
But it comes with a learning curve. From navigating CON laws to designing for specialty use, success in this arena depends on collaboration with medical professionals, legal experts, and real estate agents who understand both healthcare and commercial space.
If you're interested in entering the medical real estate space—or need help navigating a transaction—I'd be happy to share what I’m learning and help you move forward with confidence.
Frank Campobasso
Century 21 Circle
📲 Call or Text: 773-425-6265
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ABOUT FRANK CAMPOBASSO
With over 20 years of industry experience, Frank Campobasso is a seasoned real estate expert known for marketing single-family homes, townhomes, condos, multi-unit buildings, and investment properties. He is also a highly successful buyer’s agent, known for helping clients navigate competitive markets and secure the right home at the right price. Dedicated to achieving outstanding results, Frank prioritizes customer satisfaction, ensuring that his clients’ homes sell quickly and for top dollar. His expertise in pricing, preparing, and showcasing listings has earned him recognition in leading real estate magazines, newspaper articles, and radio programs.
Disclaimer:
This article is for informational purposes only and is based on personal experience and industry knowledge. It is not intended to provide legal, financial, or medical advice, nor does it establish any attorney-client, medical, or broker-client relationship. Real estate laws, healthcare regulations, and Certificate of Need (CON) requirements vary by state and can change over time. Always consult with qualified legal, medical, or regulatory professionals before making decisions related to healthcare facilities or medical real estate investments.
