What is the realistic medical office conversion underwriting today?

A medical office conversion of Class B/C office in Orlando's AdventHealth-adjacent corridors underwrites to an equity multiple of 1.8×-2.5× and an approximate IRR of 14-22% depending on acquisition basis and conversion capex. The acquisition range for conversion-viable Class B/C in the University/436 and Airport corridors is $80-$120/SF for buildings with the structural prerequisites, minimum 10-foot ceilings, adequate electrical, accessible plumbing risers, parking ratio of 4:1,000 or better. Conversion capex for full clinical build-out runs $80-$120/SF plus 15-20% for soft costs and carrying costs during the 12-18 month conversion period. The exit is priced at 5.5-6.5% medical office cap rates against $20-$28/SF NNN stabilized rents, which are achievable for AdventHealth-affiliated physician practices that value proximity to hospital campuses over building age. The most important underwriting variable is pre-leasing: a building with 40-50% pre-committed to an AdventHealth-affiliated practice group before conversion begins trades at the better end of the cap rate range at exit. Without pre-leasing commitment, underwrite conservatively at 6.25-6.5% exit cap.