Medical office buildings rarely trade inside Park City proper, so a sourcing assignment for this asset class usually widens first to the clinic corridor near Round Valley and Quinns Junction, then out toward Heber City before a workable candidate surfaces. The scope of work starts with a supply survey, not a single listing, and it is built to hand off cleanly to a lender and a qualified intermediary once a target is named. Getting that survey right at the outset avoids resetting the search halfway through the forty-five-day window.
Sourcing Scope for Medical Office Assets
A sourcing package for this asset class covers single-tenant clinic buildings, multi-tenant medical office with shared imaging or lab space, and the occasional physician-owned condo unit inside a larger Park City mixed-use building. Square footage in the Basin tends to run smaller than metro medical office stock, so the search radius is set early rather than discovered late in diligence.
Tenant mix drives the bid comparison more than finish quality does. A single-specialty physician group lease reads differently than a hospital-system-backed lease, and that distinction changes how the replacement candidate is scored against the relinquished property's income and debt profile.
Comparable sales data for this asset class is thin locally, so a sourcing scope typically pulls in transactions from the broader Wasatch Back and Salt Lake Valley to build a credible pricing range rather than relying on the one or two Park City-area sales that may exist in a given year.
Underwriting Package Contents
Before a candidate goes on the identification list, the sourcing package is assembled so the investor's lender and advisor team can move without waiting on a second document request. A typical package includes:
- lease abstract and renewal option summary
- CAM and operating expense reconciliation history
- tenant financial or credit summary
- building condition and mechanical assessment
- zoning and conditional-use confirmation
- parking ratio study for multi-tenant use
- Phase I environmental report
Each line item is dated and logged as it is received, since a missing document discovered on day forty is a much harder problem than one flagged on day ten.
Tenant and Lease Structure Review
Net lease, modified gross, and full-service structures all show up in this corridor, and the lease structure itself does not determine like-kind eligibility since that test applies to the real property, not the rent format. What matters for scope clarity is whether the tenant's covenant, renewal history, and improvement obligations line up with what the investor is trying to replace.
Physician group leases sometimes carry personal guarantees that expire with a retiring partner, and that detail belongs in the submittal package rather than surfacing after the identification window has already closed.
Renewal option language is read closely as well, since a below-market renewal right can suppress a building's resale value even while current rent looks strong on the rent roll.
Timeline Coordination With the 45-Day Clock
Medical building appraisals and lender underwriting for this asset class commonly run longer than a standard retail or multifamily file, so the diligence sequence is built working backward from day forty-five rather than forward from the day a listing is found. Coordination with the lender's medical-use underwriting desk starts as soon as a Park City-area candidate is shortlisted, not after identification is filed.
A specialized appraiser familiar with medical-use buildings is often required by the lender, and scheduling that appraisal early in the sequence keeps the closing coordination phase from absorbing the delay later.
Common Scope Gaps
The gaps that surface late are predictable: a tenant improvement allowance obligation that carries forward to the new owner, a multi-tenant parking ratio that no longer meets current code, or mechanical systems that were never upgraded to medical-grade air handling. Each of these belongs in the sourcing package as a flagged line item, not a surprise during the closing coordination phase in Park City.
A seller's verbal assurance that a gap does not matter is not a substitute for written confirmation, so each flagged item is tracked until it is either resolved in writing or priced into the offer.
Common 1031 Exchange Questions
Is there much medical office inventory directly in Park City?
Direct Park City stock is limited, so most sourcing work runs through the Snyderville Basin clinic corridor and out along US-40 toward Heber City. A wider radius is set from the start rather than discovered mid-diligence, which keeps the identification timeline from slipping.
Does a medical office lease need to be triple net to qualify as replacement property?
Like-kind treatment applies to the real property itself, not the lease format, so net, modified gross, and full-service structures can all work. The lease structure still matters for underwriting and cash flow comparison, just not for exchange eligibility, and that distinction is worth confirming with the investor's advisor early.
How does tenant credit affect the exchange timeline?
A hospital-backed lease usually underwrites faster than a single physician group lease with a personal guarantee, which can shift how much diligence time is left before the forty-five-day identification deadline. Weaker tenant credit means the credit summary should be requested earlier, not later, so the lender has time to react.
Can a medical office purchase trigger boot if it costs less than the relinquished property?
A price or debt shortfall between the relinquished sale and the replacement purchase can create boot, which is a question for the investor's CPA rather than something resolved during sourcing. The sourcing package flags the shortfall so the advisor conversation happens before closing, not after, while there is still time to adjust the purchase structure.
Who handles the environmental and building condition review?
Third-party engineers and environmental consultants run those reports; the sourcing role is to schedule them early enough that findings land inside the diligence window rather than after an identification has already been filed. Reports ordered late tend to become the reason a candidate has to be dropped from the list.
