The design and application of magnetic nanoparticles for use as magnetic hyperthermia agents has garnered increasing interest over the past several years. When designing these systems, the fundamentals of particle design play a key role in the observed specific absorption rate (SAR). This includes the particle's core size, polymer brush length, and colloidal arrangement. While the role of particle core size on the observed SAR has been significantly reported, the role of the polymer brush length has not attracted as much attention. It has recently been reported that for some suspensions linear aggregates form in the presence of an applied external magnetic field, i.e. chains of magnetic particles. The formation of these chains may have the potential for a dramatic impact on the biomedical application of these materials, specifically the efficiency of the particles to transfer magnetic energy to the surrounding cells. In this study we demonstrate the dependence of SAR on magnetite nanoparticle core size and brush length as well as observe the formation of magnetically induced colloidal arrangements. Colloidally stable magnetic nanoparticles were demonstrated to form linear aggregates in an alternating magnetic field. The length and distribution of the aggregates were dependent upon the stabilizing polymer molecular weight. As the molecular weight of the stabilizing layer increased, the magnetic interparticle interactions decreased therefore limiting chain formation. In addition, theoretical calculations demonstrated that interparticle spacing has a significant impact on the magnetic behavior of these materials. This work has several implications for the design of nanoparticle and magnetic hyperthermia systems, while improving understanding of how colloidal arrangement affects SAR.