The Physician's Guide to Real Estate Sale-Leasebacks

Double Your Return While Maintaining Control

When most physicians consider selling their professional real estate, they often wait until retirement is on the horizon.

That means they almost always overlook the near-term option of increasing cash flow, reallocating capital into higher returning assets or expansion efforts, or cleaning up their balance sheet – the strategic Sale-leaseback.

A Strategic sale-leaseback takes both the potential sale of your ASC business and the sale-leaseback of your real estate into account so as to maximize the total value of both assets.

ASC Realty Advisors pioneered the Strategic sale-leaseback model to find innovative ways to offer physician-owners a powerful strategy to unlock the equity in both their ASC business and real estate while maintaining full operational control through a long-term lease.

Most importantly, It allows you to transform the 2-3% annual returns on your medical real estate into investments that could potentially earn 10% or more.

The key component in a Strategic sale-leaseback lies in structuring the lease terms. Investors seek stable, long-term returns, typically preferring lease commitments of 7-10 or more years. The longer and more secure the lease terms, the higher the property valuation and sale price.

Some of the near-term benefits of a sale-leaseback are:

  • Immediate access to capital

  • Capital to pay down debt, expand or renovate the ASC

  • Maintain operational control

  • Tax benefits

Long-term, strategic advantages include the ability to :

  • Lock in favorable lease terms when you have maximum leverage

  • Maintain operational control during your remaining practice years

  • Create a clear succession plan for eventual practice transition

  • Optimize the property's market value before any strategic practice sale

While we are advising on a strategic transaction, our team will also guide you through every aspect of a real estate sale-leaseback structuring, from initial valuation through lease negotiation and transaction closing. We leverage our deep market knowledge and extensive investor relationships to secure optimal terms that align with your long-term professional and financial objectives.

ASC Realty Advisors pioneered the “Strategic sale-leaseback” model to find innovative ways to maximize the combined value of  your real estate and practice

What's in Your Lease?

Untangling Hidden Liabilities

Many medical facility leases do not take into account real estate values and the terms that third party investors seek when paying the highest prices. Often the best lease terms and the verbiage are an afterthought in a strategic transaction and when forming new partnerships. Expert guidance is necessary to devise a lease that is mutually beneficial to the strategic buyer and the real estate.

Common lease issues that can negatively impact your property value include:

  • Personal liability guarantees that extend beyond reasonable terms

  • Restrictive business control provisions that limit operational flexibility

  • Burdensome financial reporting requirements

  • Constraints on business sale or transfer options

  • Restrictions on physician partnership changes

  • Above-market rent escalation clauses

  • Limited control over option period rental rates

  • Equipment liens that complicate asset management

  • Problematic cancellation or termination provisions

  • Failure to achieve a true NNN lease

Any of these hidden complexities can reduce your property's market value and limit future sale options. As pioneers of the Strategic sale-leaseback model for medical facilities, we offer unmatched expertise in structuring optimal lease terms and our complimentary, no-obligation lease analysis helps identify potential issues before they affect your transaction.