Many physicians who own their ASC and MOB real estate may be considering a sale-leaseback of their ASC/MOB real estate to take advantage of the increase in value of medical real estate and the benefits of a sale-leaseback.
These benefits include:
- Presents the opportunity to reset rents and facility expenses to increase EBITDA.
- Provides capital to modernize or expand the facility.
- Sellers can pay down existing debt and remove loan guarantees.
- Many real estate buyers will also pay for renovations, expansions and additional facilities as part of the transaction.
- Many real estate buyers will pay a premium for the real estate while allowing the physicians to be minority partners in the real estate.
- Sellers can take significant money off the table to invest in higher yielding investments.
- Greater liquidity – the higher yielding investments can be sold at any time.
- Capital gains taxes are less than tax on the ordinary income tax rate on your rental income.
- Sellers have the option to maintain full operating control over the facility.
- Makes it easier to add new partners and avoid conflicts between non-real estate owners and real estate owning physicians.