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Don&#8217;t get screwed.</text><text x="58" y="258" font-family="Arial,Helvetica,sans-serif" font-size="30" font-weight="600" fill="#6b5b4d">Leases, TI, NNN &amp; buildouts — negotiated in your favor</text><g transform="translate(1010,86)" fill="none" stroke="#C0531F" stroke-width="9" stroke-linejoin="round"><rect x="20" y="40" width="150" height="130"/><line x1="20" y1="40" x2="95" y2="6"/><line x1="170" y1="40" x2="95" y2="6"/><rect x="50" y="80" width="36" height="36"/><rect x="104" y="80" width="36" height="36"/><rect x="74" y="128" width="42" height="42"/></g></svg>

How Do I Budget a Physical Therapy Clinic Buildout?

Direct Answer

Budget a physical therapy clinic buildout at $80–$160 per square foot for a standard outpatient suite in a vanilla-shell retail or medical-office space, and at $120–$220 per square foot if you are converting raw shell or office space that lacks a single floor drain or commercial restroom.

The number most owners blow is the gym floor: a real PT clinic needs 1,200–2,500 square feet of open exercise space with reinforced flooring, and rubber athletic flooring runs $8–$14 per square foot installed while a poured cushioned surface hits $12–$20. The single biggest money move is to lease an existing medical or PT space — a former clinic with plumbing rough-ins, an ADA restroom, and adequate HVAC tonnage already in place will save you $40–$70 per square foot versus a bare retail box where you pay to bring water, drains, and a second restroom into the slab.

For a typical 2,500–4,000 square foot clinic that means a total hard-cost budget of $250,000–$640,000, plus FF&E (tables, modalities, gym equipment) of $60,000–$180,000. Do not let the landlord hand you a $25–$45 per square foot tenant improvement allowance and call it generous — for a medical use that allowance covers roughly half the real cost, so the gap comes out of your pocket or your rent.

Get a licensed mechanical engineer to confirm the existing rooftop unit can hit 350–450 square feet per ton before you sign, because a sweaty gym full of patients will overwhelm an office-rated system and you will eat a $15,000–$40,000 HVAC upgrade that should have been the landlord's base-building obligation.

What Actually Drives the Cost

Three line items decide whether your PT buildout comes in at $80 or $200 per square foot, and none of them is the paint color. First is plumbing: PT clinics need a mop sink, a clean hand-wash sink in every treatment area, and often a hydrotherapy or hot/cold modality station.

Cutting a new sanitary line into an existing slab — saw-cutting concrete, trenching, and patching — runs $3,500–$9,000 per fixture run, so a space that already has stub-outs in the right zone is worth real money. Second is the open gym area. Unlike a doctor's office full of small exam rooms, a PT clinic is mostly column-free open space, which means the demising and the structural floor matter.

If you are putting treadmills, a Pilates reformer, and weight racks down, you want a slab that can take the point loads and a finished surface that absorbs impact. Rubber rolls and tiles at $8–$14 per square foot are the workhorse; avoid anyone quoting you broadloom carpet over a gym zone.

Third is HVAC and ventilation. A room of people exercising generates heat and humidity an office system was never sized for. Plan on 350–450 square feet per ton of cooling versus the 400–500 typical for office, plus dedicated exhaust if you run a hydrotherapy room.

The smaller-but-sneaky costs add up fast. Sound attenuation between treatment bays and the open gym keeps you HIPAA-defensible and runs $2–$5 per square foot in extra batt insulation and resilient channel. Cabinetry and built-in plinths, modality carts, and a reception millwork package land at $15,000–$45,000.

ADA compliance is non-negotiable: a 60-inch turning radius in restrooms, accessible treatment tables, and ramped thresholds. Skipping the early code review is how owners discover at inspection that their dream layout fails egress and has to be rebuilt.

Build Your Number From the Ground Up

Do not start from a per-square-foot rumor. Build the budget bottom-up so you can defend every line against your contractor and your landlord. Here is the realistic breakdown for a 3,000 square foot clinic in a second-generation medical space:

• General conditions and supervision: $18,000–$35,000 (6–10% of hard cost).
• Demolition and selective removal: $3–$8 per square foot = $9,000–$24,000.
• Framing, drywall, doors, and finishes: $25–$45 per square foot = $75,000–$135,000.
• Plumbing (sinks, mop sink, modality water): $20,000–$50,000.
• HVAC upgrade or balance: $15,000–$45,000.
• Electrical and low-voltage (modalities pull real amperage): $18,000–$40,000.
• Gym and treatment flooring: $8–$20 per square foot on the gym zone = $15,000–$40,000.
• Permits, design, engineering: $15,000–$40,000.

That puts hard cost at roughly $165,000–$410,000, or $55–$137 per square foot, before FF&E. Add a 10–15% contingency because medical buildouts always find a surprise behind a wall. Equipment — tables, ultrasound and e-stim units, traction, a full free-weight and cable rig — is a separate $60,000–$180,000 capital line you should finance separately from the construction loan so you do not pay buildout interest on a treadmill.

How To Not Get Screwed

The landlord and the contractor both have ways to quietly move cost onto your side of the ledger. Here is where the money leaks and how to plug it.

The tenant improvement allowance shell game. A landlord will advertise a $30 per square foot TI allowance as if it is a gift. For a retail tenant it might be. For a medical/PT use that genuinely costs $80–$160 per square foot, that allowance is half a loaf.

Negotiate the allowance as a hard dollar figure tied to your real budget, push for $50–$80 per square foot on a longer term, and demand it be paid as a reimbursement against paid invoices — not "amortized into rent" at 8–10% interest, which is a loan dressed up as a concession.

If they insist on amortizing, you are financing your own buildout at the landlord's markup; price that into your rent comparison.

The base-building dodge. Plumbing mains, the main electrical service, a code-compliant fire sprinkler grid, and HVAC capacity to the suite are base-building items the landlord typically owes. If your space is short on cooling tonnage or lacks a sanitary main near your gym zone, that is the landlord's problem to fix, not a "tenant cost." Get the lease to spell out base-building condition in a delivery exhibit.

Owners who skip this discover at permit time that they are paying $15,000–$40,000 for an HVAC unit that should never have been their line item.

The unvetted general contractor. Always competitively bid at least three licensed GCs with medical buildout experience, and read the bids line by line — a low base number with fat allowances and exclusions is the oldest trick in the book. Insist on a fixed-price (stipulated sum) contract, not cost-plus, for a defined scope; cap change-order markup at 10–15%; and tie payments to a draw schedule with retainage of 10% held until punch-list completion.

Never pay more than 10% up front.

Timeline, Permits, and Cash Flow

A PT clinic buildout in a second-generation space typically runs 10–16 weeks of construction after permits, and permitting itself is 4–10 weeks depending on jurisdiction and whether your use triggers a health-department review. Every week of overrun past your rent-commencement date is money out the door — a 3,000 square foot suite at $28 per square foot annual rent burns roughly $1,615 per week while empty.

Negotiate a rent-free buildout period of 3–5 months so construction time is not also rent-paying time. Sequence your equipment delivery to land after the floor and electrical are done but before your certificate of occupancy inspection, so you are not storing $120,000 of modalities in a contractor's dusty job site.

Keep a 15% cash contingency liquid and outside the construction loan; medical inspectors routinely require a change you did not plan for, and a contractor who has to wait on your funds will park your job behind a paying one.

FAQ

How much per square foot should a physical therapy clinic buildout cost? Plan on $80–$160 per square foot in a second-generation medical or PT space and $120–$220 per square foot if you are starting from raw shell or office space lacking plumbing and adequate HVAC. The open gym flooring, extra plumbing fixtures, and cooling capacity are what push PT above a standard office buildout.

Will the landlord's tenant improvement allowance cover it? Rarely in full. A typical $25–$45 per square foot allowance covers roughly half a real medical buildout. Negotiate for $50–$80 per square foot on a longer lease term, paid as reimbursement against invoices, and refuse to have it amortized back into rent at 8–10% interest unless you price that as the loan it is.

What is the most expensive surprise in a PT buildout? HVAC and plumbing. An office-rated rooftop unit cannot handle a room full of exercising patients, so confirm 350–450 square feet per ton before you sign or eat a $15,000–$40,000 upgrade. Cutting new sanitary and water lines into an existing slab runs $3,500–$9,000 per fixture run.

How long does a PT clinic buildout take? About 10–16 weeks of construction plus 4–10 weeks of permitting. Negotiate a 3–5 month rent-free buildout period so your construction time is not also burning rent at roughly $1,600 per week on a 3,000-square-foot suite.

Sources

• CBRE, "U.S. Healthcare Real Estate and Medical Office Construction Cost Trends" (2025).
• JLL, "Healthcare and Life Sciences Fit-Out Cost Guide" (2025).
• Cushman & Wakefield, "Healthcare Capital Markets and Medical Office Outlook" (2025).
• RSMeans / Gordian, "Building Construction Costs With RSMeans Data — Medical Occupancy" (2025).
• BOMA International, "Medical Office Buildings: Standard Methods and Operating Cost Benchmarks."
• NAIOP, "Office and Medical Tenant Improvement Allowance Benchmarks" (2025).
• American Physical Therapy Association (APTA), "Clinic Design and Space Planning Resources."
• Facility Guidelines Institute (FGI), "Guidelines for Design and Construction of Outpatient Facilities" (2022 edition).