Why Does Aurora's Office Market Present a Unique Two-Tier Opportunity?
Aurora's office market operates as two fundamentally different markets, each with distinct financing dynamics and investment characteristics. The first market, centered on the Fitzsimons Innovation Community and CU Anschutz Medical Campus, represents one of the strongest medical office and life science markets in the Mountain West. The second market, encompassing general suburban office space along the I-225 corridor, City Center, and other Aurora locations, faces the same vacancy and demand challenges affecting suburban office markets nationwide.
Understanding this two-tier reality is essential for Aurora office investors and borrowers because lenders evaluate these markets very differently. Medical office and life science properties near Fitzsimons command cap rates of 5.0% to 6.5%, receive LTV up to 75%, and attract competitive permanent financing from banks, life insurance companies, and CMBS lenders. General suburban office properties in other Aurora locations face cap rates of 7.5% to 9.0%, limited LTV of 55% to 65%, and more selective lending appetite.
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Aurora's total office inventory encompasses approximately 9.8 million square feet across 318 buildings, with the Colorado Science and Technology Park at Fitzsimons containing roughly 6 million square feet of corporate and research space. Overall vacancy across Aurora's office market ranges from 10.4% to 15.6% depending on the data source, though the Fitzsimons area maintains vacancy well below the city-wide average at approximately 5% to 8%.
For borrowers exploring office financing in Aurora, Clear House Lending connects investors with a network of over 6,000 commercial lenders to find the most competitive rates and terms based on each property's specific submarket and tenant profile.
What Office Loan Programs Are Available in Aurora?
Aurora's office financing landscape includes programs suited to medical office acquisitions, owner-occupied buildings, value-add repositioning, and stabilized investment properties.
Conventional Bank Loans serve as the primary financing vehicle for stabilized Aurora office properties. Banks offer rates between 6.0% and 7.5% with 5 to 10 year terms and LTV up to 70%. Medical office buildings near the Anschutz campus receive the most favorable bank underwriting, while general office in higher-vacancy submarkets may face reduced LTV of 60% to 65% and stricter cash flow requirements.
SBA Loans provide exceptional terms for owner-occupants acquiring or expanding office space. The SBA 504 program offers down payments as low as 10%, rates between 5.75% and 6.75%, and terms up to 25 years. Aurora's growing base of medical practices, professional service firms, and technology companies clustered around the Anschutz campus and along Havana Street actively use SBA financing. This program is particularly valuable for healthcare providers establishing new practices or expanding existing facilities.
CMBS (Conduit) Loans provide non-recourse permanent financing for larger office properties with creditworthy tenants and long-term leases. Rates range from 6.0% to 7.5% with 5 to 10 year terms. CMBS lending is most active for Aurora medical office buildings and single-tenant properties leased to credit tenants on NNN terms.
Bridge Loans fund office acquisitions, tenant transitions, and value-add repositioning with 12 to 36 month terms and rates between 8.5% and 12.0%. Bridge financing is important in Aurora's office market for investors acquiring properties during tenant transitions or vacancy periods, with plans to stabilize and refinance to permanent debt.
DSCR Loans qualify borrowers based on office property cash flow rather than personal income. Rates range from 7.5% to 9.5% with LTV of 70% to 75%. DSCR loans work well for Aurora office investors with complex income structures or who are scaling investment portfolios.
Life Insurance Company Loans offer the lowest rates (5.5% to 6.5%) and longest terms (10 to 25 years) for trophy medical office properties near the Anschutz campus. These loans require low LTV of 60% to 65% and premium property quality, but the rate savings are substantial for qualifying assets.
Use the commercial mortgage calculator to estimate monthly payments for your Aurora office property.
Which Aurora Office Submarkets Attract the Strongest Lender Interest?
Lender appetite varies dramatically across Aurora's office submarkets, and understanding where your property falls in this spectrum is critical for setting realistic financing expectations.
Fitzsimons/Anschutz Medical Campus is the clear leader in Aurora office financing. The 578-acre combined campus houses the University of Colorado Hospital, Children's Hospital Colorado, the VA Eastern Colorado Health Care System, and a growing cluster of biotech and pharmaceutical companies. The Colorado Science and Technology Park contains approximately 6 million square feet of corporate and research space. Vacancy runs just 5% to 8%, and rents of $28 to $35 per square foot are the highest in Aurora. Lenders compete aggressively for medical office loans in this submarket.
Southlands and Southeast Aurora offer moderate office lending appeal, with medical office and professional service buildings benefiting from the area's growing residential population and higher household incomes. Vacancy of 8% to 12% and rents of $22 to $28 per square foot support reasonable financing terms, particularly for medical tenants.
City Center presents a mixed picture, with approximately 1.5 million square feet of office inventory and vacancy between 12% and 16%. Lenders are more selective here, favoring medical and professional office buildings over general corporate space. SBA loans are popular for owner-occupants in this submarket.
Havana Street Corridor serves small businesses and professional service firms with approximately 800,000 square feet of smaller office buildings. SBA financing is the most common program here, with rates between 5.75% and 6.75% for owner-occupants.
I-225 Corridor faces the most challenging lending environment among Aurora's office submarkets, with vacancy between 14% and 18% and rents of $18 to $24 per square foot. Lenders approach this submarket conservatively, and bridge financing may be necessary for acquisitions that require lease-up before qualifying for permanent debt.
What Types of Aurora Office Properties Attract the Best Financing?
The type of office property significantly impacts financing availability and terms in Aurora's market.
Medical Office Buildings (MOBs) attract the strongest lender interest across Aurora, with Fitzsimons-area properties receiving premium terms. Medical tenants provide stability because healthcare services are recession-resistant and demand for medical office space continues to grow. Cap rates of 5.0% to 6.5% for Aurora medical office reflect the sector's strength. Lenders offer LTV up to 75% and the most competitive rates for well-located medical office properties.
Life Science and Lab Space is an emerging high-demand segment in Aurora, driven by the Fitzsimons Innovation Community's expansion including the planned Bioscience 4 facility (230,000 to 800,000 square feet). Lenders are developing specialized programs for life science properties that account for the higher tenant improvement costs and specialized building systems these facilities require.
Flex and R&D Space blends office and light industrial uses and benefits from demand near the Fitzsimons campus and along the I-70 corridor. Cap rates of 6.0% to 7.0% and vacancy of 8% to 12% support moderate financing terms. SBA loans are particularly popular for owner-occupants in this category.
Class A Corporate Office faces more challenging financing conditions in Aurora due to elevated vacancy and competition from newer office developments in Denver and the Tech Center. Lenders require higher DSCR ratios (1.35x to 1.50x), lower LTV (60% to 65%), and long-term lease commitments to underwrite general corporate office. However, properties with strong credit tenants and long-term leases can still secure competitive terms.
Class B and C Office properties face the most conservative lending environment. Many lenders have reduced or eliminated suburban Class B/C office from their approved property types. Bridge financing or owner-occupant SBA loans may be the primary options for these properties. Some investors are exploring adaptive reuse conversions to residential or other uses, which requires specialized construction and bridge financing.
What Are Current Cap Rates for Aurora Office Properties?
Cap rates serve as the primary valuation metric for Aurora office properties and vary significantly by property type, location, and tenant quality.
Medical office near Fitzsimons commands the tightest cap rates at 5.0% to 6.0%, with pricing of $300 to $450 per square foot. These low cap rates reflect the institutional demand, low vacancy, and stable cash flows generated by healthcare tenants in this premier submarket.
Medical office elsewhere in Aurora trades at cap rates of 5.5% to 6.5% with pricing of $200 to $300 per square foot. While not benefiting from the Fitzsimons halo effect, medical office properties throughout Aurora perform well relative to general office due to the inherent stability of healthcare tenancy.
Life science and lab space carries cap rates of 5.5% to 6.5% with pricing of $250 to $400 per square foot, reflecting the specialized nature and growing demand for these facilities in Aurora.
Class A corporate office trades at cap rates of 6.5% to 8.0% with pricing of $180 to $250 per square foot. The wide cap rate range reflects the variance in tenant quality, lease term, and building competitiveness within this category.
Class B suburban office faces the widest cap rate range at 7.5% to 9.0% with pricing of $100 to $180 per square foot, reflecting the elevated vacancy and tenant demand challenges facing this property type nationally.
Borrowers should use the DSCR calculator to model cash flow coverage for office acquisitions.
How Does the Anschutz Campus Impact Aurora Office Financing?
The Anschutz Medical Campus represents the most powerful driver of Aurora's office market and fundamentally shapes lending conditions for nearby properties.
The campus is projected to employ approximately 45,000 workers at full build-out across the University of Colorado health system, Children's Hospital Colorado, the VA system, and a growing cluster of biotech, pharmaceutical, and medical device companies. This employment base generates demand for medical office space, research facilities, support services, and professional offices that house the attorneys, accountants, consultants, and other professionals who serve the healthcare sector.
Two major development projects will further strengthen the Fitzsimons office market. Bioscience 4, a phased life sciences facility planned for 230,000 to 800,000 square feet, will attract new research and commercial tenants requiring lab and office space. The Fitz 500, an eight-story mixed-use office building delivering over 200,000 square feet of Class A space, will add modern corporate office inventory to the campus.
Lenders recognize the Anschutz campus effect and adjust their underwriting accordingly. Medical office properties within a 10-minute commute of the campus receive more favorable LTV allowances (5% to 10% higher than comparable general office), lower DSCR requirements (1.20x vs. 1.35x for general office), and more competitive interest rates (50 to 100 basis points lower). This financing advantage can translate to significantly higher leveraged returns for investors targeting the Fitzsimons submarket.
Contact Clear House Lending to discuss financing for Aurora medical office and life science properties near the Anschutz campus.
What Should Aurora Office Borrowers Know About Tenant Risk?
Tenant quality and lease structure are the most critical underwriting factors for Aurora office loans, and borrowers who understand how lenders evaluate tenancy can better position their financing requests.
Lenders evaluate several tenant-related factors. Tenant credit quality measures the financial strength of each tenant. Investment-grade tenants (rated BBB or higher) receive the most favorable underwriting treatment. Healthcare systems, government agencies, and large corporations with strong balance sheets provide the certainty lenders prefer. Smaller professional service firms require more detailed financial analysis.
Lease term remaining relative to the loan term is critical. Lenders strongly prefer properties where the major leases extend beyond the loan maturity date. An office building with 7 years remaining on its primary lease supports a 5-year loan term comfortably, while a property with leases expiring in 2 years creates rollover risk that lenders price into higher rates or lower LTV.
Tenant improvement (TI) obligations represent a significant cost for office properties, particularly medical office buildings that require specialized plumbing, electrical, HVAC, and medical gas systems. Lenders evaluate the borrower's reserves for TI costs when existing leases expire and factor these obligations into cash flow projections.
Weighted average lease term (WALT) measures the average remaining lease term across all tenants, weighted by the proportion of rent each tenant pays. Aurora office properties with a WALT of 5 years or more receive the most favorable financing. Properties with shorter WALTs may need bridge financing until leases can be extended or new tenants secured.
What Are the SBA Options for Owner-Occupied Aurora Office Buildings?
SBA loans represent one of the most compelling financing options for Aurora business owners who occupy their office space.
The SBA 504 program offers Aurora owner-occupants down payments as low as 10%, fixed rates between 5.75% and 6.75%, and terms up to 25 years. The loan structure involves a conventional first mortgage from a participating bank (50% of project cost), a CDC/SBA second mortgage (40% of project cost), and a 10% borrower equity contribution. This structure allows business owners to acquire high-quality office space with minimal cash investment.
The SBA 7(a) program provides more flexible financing for smaller office acquisitions and expansions, with loan amounts up to $5 million and terms up to 25 years for real estate. Rates are variable, typically tied to prime plus 1.5% to 2.75%.
Aurora businesses most commonly using SBA office financing include medical practices establishing new clinics near the Anschutz campus, dental and veterinary practices, accounting and law firms, technology companies, and professional service businesses. The Havana Street corridor, City Center, and Southeast Aurora contain significant inventory of smaller office buildings suitable for SBA-financed acquisition.
SBA loans require the borrower to occupy at least 51% of the building and demonstrate the business's ability to service the debt from operating cash flow. The application process takes 60 to 120 days and requires business financial statements, tax returns, and a business plan.
Frequently Asked Questions About Aurora Office Loans
What LTV can I get for an Aurora office building?
LTV for Aurora office loans ranges from 55% to 90% depending on the property type, location, and loan program. Medical office near the Anschutz campus qualifies for up to 75% LTV with bank financing. SBA 504 loans for owner-occupied office allow up to 90% LTV (10% down). General suburban office in higher-vacancy submarkets may be limited to 55% to 65% LTV. CMBS loans typically cap at 65% to 70% for office properties. Bridge loans offer up to 70% to 75% for value-add situations.
Are Aurora office buildings still financeable given remote work trends?
Yes, but lender selectivity has increased significantly. Medical office properties near the Anschutz campus remain highly financeable with competitive terms. Life science and lab space is in strong demand. Owner-occupied buildings qualify for SBA financing regardless of broader market trends. General suburban office faces the most scrutiny, and borrowers should expect lower LTV, higher rates, and more stringent tenant requirements. Properties with long-term leases to creditworthy tenants remain financeable across all Aurora submarkets.
How do tenant improvements affect Aurora office loan underwriting?
Lenders factor tenant improvement (TI) costs into their cash flow analysis and reserve requirements. Medical office TI costs in Aurora range from $50 to $150 per square foot for new buildouts and $20 to $50 per square foot for second-generation space. General office TI costs range from $30 to $80 per square foot. Lenders may require borrowers to escrow TI reserves for leases expiring within the loan term, particularly for larger tenants. Properties with recently completed TIs receive more favorable underwriting because the rollover risk is further in the future.
Can I finance the conversion of an Aurora office building to another use?
Yes, though this requires specialized financing. Bridge loans or construction loans fund the conversion work at rates between 8.0% and 12.0% with 18 to 36 month terms. The most common conversions in Aurora include office-to-residential, office-to-medical, and office-to-flex/lab space. Lenders evaluate the feasibility study, conversion cost estimates, projected income after conversion, and the borrower's development experience. Zoning approval and building code compliance are critical considerations for any conversion project.
What is the minimum DSCR requirement for an Aurora office loan?
DSCR requirements for Aurora office loans range from 1.20x to 1.50x depending on the property type and loan program. Medical office properties near the Anschutz campus may qualify with DSCR as low as 1.20x. General suburban office typically requires 1.35x to 1.50x to account for higher vacancy risk. SBA loans evaluate business cash flow rather than property DSCR. Bridge loans focus on the business plan and exit strategy rather than current DSCR.
How long does it take to close an Aurora office loan?
Closing timelines for Aurora office loans depend on the program. Bridge loans close in 10 to 21 business days. Conventional bank loans require 45 to 75 days. CMBS loans take 60 to 90 days. SBA loans require 60 to 120 days. Life insurance company loans take 60 to 120 days. The longest timeline elements are appraisals (10 to 21 days), environmental assessments (14 to 21 days), and SBA guarantee processing (30 to 45 days).
Positioning Your Aurora Office Investment for Success
Aurora's office market presents a clear two-tier opportunity. The Fitzsimons and Anschutz Medical Campus area offers institutional-quality medical office and life science investment with strong lender support and premium returns. Meanwhile, general suburban office in other Aurora submarkets requires more creative financing strategies but can deliver value-add returns for experienced investors willing to navigate higher vacancy and selective lending conditions.
Whether you are acquiring a medical office building near the Anschutz campus, purchasing an owner-occupied office through the SBA program, repositioning a vacant suburban office property, or exploring adaptive reuse conversion, understanding the lending landscape for each specific property type and submarket is essential.
Contact Clear House Lending today to discuss your Aurora office financing needs and get matched with the right lender from our network of over 6,000 commercial lending sources.