For physician-owners of ambulatory surgery centers (ASCs), a sale-leaseback of the ASC facility can be a powerful financial tool—unlocking capital, reducing personal real estate risk, and preserving long-term control of the operating business. However, maximizing the benefits of a sale-leaseback requires more than just a favorable market. It requires a disciplined, strategic approach.
Why Discipline Matters
A sale-leaseback is not just a real estate transaction—it’s a long-term financial partnership. The lease you sign will impact your center’s operational flexibility, expense structure, and even future valuation. Taking a structured, informed approach ensures the transaction supports—not compromises—your ASC’s long-term success.
Key Elements of a Disciplined Approach
1. Financial and Strategic Readiness
Before entering the market, physician-owners should align internally on goals: Are you seeking maximum value? Long-term control? A recapitalization event? Understanding your objectives will guide decisions about lease length, renewal options, and rent structure.
2. Fair Market Valuation
Engage an experienced healthcare real estate appraiser or advisor to determine fair market value of both the property and the lease. This ensures pricing and rent terms are compliant with regulatory standards and attractive to institutional buyers.
3. Competitive Bidding Process
Rather than negotiating with a single buyer, run a controlled, competitive bid process with multiple healthcare-focused investors. This increases the likelihood of a premium valuation and favorable lease terms.
4. Optimized Lease Structure
Terms like triple-net (NNN) leases, annual rent escalators, and renewal options should be carefully negotiated. Lease terms must protect the ASC’s long-term stability while making the asset attractive to buyers.
5. Experienced Advisors
Physician groups should engage brokers, attorneys, and valuation experts who specialize in ASC sale-leasebacks. These transactions involve nuances that general real estate professionals may overlook—such as certificate-of-need issues, ASC accreditation, and the interplay between real estate and healthcare operations.
Conclusion
A disciplined sale-leaseback process transforms a valuable—but illiquid—asset into flexible capital for growth, succession planning, or shareholder liquidity. But discipline is key. With proper planning, market insight, and expert guidance, physician-owners can capture full value without compromising operational independence.
The right guidance can help you unlock capital while ensuring your control of your property. Physicians can obtain more information about sales of ASC and MOB real estate by contacting Jon Vick or J.H. Winokur Inc.