Major metros get all the press, but the real momentum in physician office space is happening somewhere quieter. Secondary markets, mid-size regional hubs, and even smaller cities in the Southeast and Sun Belt have quietly become the most competitive destinations for physicians setting up or expanding a practice. The combination of lower overhead, underserved patient populations, and purpose-built medical campuses has flipped the old calculus entirely.
If you’re a physician or practice administrator evaluating where to plant your flag, the conventional wisdom pointing you toward Atlanta or Dallas may actually be working against you. Here’s why.
The Physician Workforce Is Growing Fast, and So Is the Competition for Space
The supply side of this story starts with raw numbers. The 2024 physician census conducted by the Federation of State Medical Boards documents a total of 1,082,187 actively licensed physicians across the United States and the District of Columbia, marking a 27% growth since 2010, according to the FSMB’s 2024 census published in the Journal of Medical Regulation. More physicians means more competition for quality space, and in major metropolitan markets that competition has become brutal.
Big-city medical office buildings in markets like Los Angeles, Dallas, and New York are tight. Rents keep climbing. Build-out timelines stretch for months. Getting a move-in-ready suite in a credible medical campus near high patient traffic is harder than it used to be, and it costs considerably more when you do find one.
Secondary cities simply do not have that problem yet. And the window to take advantage of that gap is narrowing.
What “Underserved” Actually Means for a New Practice
There’s a reflexive concern that smaller markets mean smaller patient bases. That concern misreads the opportunity. The more meaningful question isn’t how many people live nearby. It’s how many of them currently have a physician.
According to the Health Resources and Services Administration’s 2025 State of the Primary Care Workforce report, 7.2% of U.S. counties had no primary care physician at all in 2023, and the national ratio stood at 101.0 primary care physicians per 100,000 population. In smaller regional markets, that ratio often runs significantly lower, which means a physician entering those markets isn’t fighting over patients. They’re filling a gap that’s been open for years.
That’s a fundamentally different business environment than walking into an already-saturated suburban metro and trying to pull patients away from three entrenched practices on the same block.
The Tier-2 Practice Readiness Framework
Not every small city is a smart bet. There’s a real difference between a town with an underserved population and a town with the infrastructure to actually support a growing practice. The distinction matters a lot before you sign a lease.
Here’s a simple three-factor framework for evaluating smaller-market medical campuses:
- Existing patient traffic: Is the campus already generating foot traffic from established tenants? Co-location with complementary specialties, imaging centers, or surgery centers means patients are already coming to the building before you open your door.
- Regional draw radius: Does the city serve as a hub for a broader multi-county or tri-state area? A city that draws from a 60-mile radius has an effective patient base far larger than its resident population suggests.
- Move-in ready availability: Purpose-built medical suites with existing exam rooms, plumbing, and code-compliant layouts dramatically cut your time to open and reduce build-out cost. That’s real capital you keep.
Dothan, Alabama is a textbook example of a market that checks every box. It sits at the geographic center of a tri-state area spanning Alabama, Florida, and Georgia. Patients drive in from rural counties across all three states for specialty care. The city functions as a regional healthcare hub, not a local one. A physician relocating here and securing Physician office space for lease in Dothan AL at a campus like Health Center South gains immediate proximity to an on-site surgery center, an established roster of co-tenants across multiple specialties, and a patient population that is actively looking for providers. That’s a different equation than opening in a crowded suburb where you’re one of forty options.
Why Campuses Beat Standalone Office Buildings
Location matters. But within a given market, the structure of your space matters just as much. Solo medical office buildings in strip malls or converted retail spaces create friction at every level, from patient navigation to referral relationships with other providers.
Purpose-built medical campuses solve problems you didn’t know you had until you were already in a lease. Here’s what changes when you’re inside a true medical campus rather than a standalone suite:
- Referral relationships form naturally because your colleagues are down the hall, not across town.
- Patients trust the address. A recognized medical campus carries institutional credibility that a converted office park does not.
- Shared infrastructure, from secure parking to 24-hour access to central reception areas, reduces your overhead without reducing your patient experience.
- Research and education affiliations that often anchor campus tenants bring prestige and patient volume that independent buildings can’t replicate.
The right campus also gives you room to grow without forcing a relocation. A practice that starts in 2,600 square feet and expands to 11,000 square feet five years later ideally does that without switching addresses, rebuilding patient habits, or renegotiating from scratch in an unfamiliar building.
A Practical Checklist Before You Commit to a Lease
Before signing anything, work through this checklist. Every item here is something physicians routinely overlook until after the ink dries.
- Confirm the suite is genuinely move-in ready. Ask specifically about existing exam room buildout, plumbing, and medical-grade HVAC. “Move-in ready” means different things to different landlords.
- Map the co-tenant mix. Which specialties are already in the building? Complementary specialties send you referrals. Competing specialties don’t.
- Evaluate the parking situation honestly. Patient-facing practices live and die on accessible parking. Underground or covered parking is a legitimate differentiator, not a luxury.
- Ask about expansion options in writing. If your practice grows, can you add square footage without leaving the campus?
- Understand the market’s regional draw. Request any available data on where current campus patients originate. A tri-state catchment area changes your revenue model significantly.
“The most successful physician practice relocations we see share one trait: the physician evaluated the patient population before evaluating the space, not after.” – A consistent finding in healthcare real estate advisory research on practice location decision-making.
That order of operations is everything. The space is a vessel. The market is the opportunity. Get the market right and almost any reasonable space decision works out. Get the market wrong and no amount of beautiful exam rooms will save you.
The Bottom Line on Secondary Markets
Major metros will always attract physicians. But the math is shifting. Higher rents, saturated patient bases, and brutal competition for quality space are pushing smart practice builders toward regional hubs that offer something big cities can’t: room to grow without fighting for every patient.
The physicians who figure this out first will have their pick of the best campuses, the most favorable lease terms, and the most loyal patient bases. The ones who wait will find those secondary markets looking a lot more like the metros they were trying to escape. Which kind of decision-maker are you?
