A sale-leaseback can be a strategic tool for ambulatory surgery center (ASC) physician-owners to unlock capital while continuing to operate in the same facility. However, when not approached carefully, the process can lead to costly missteps. The following are some of the most common mistakes made by physician-owners when executing ASC real estate sale-leaseback transactions—and how to avoid them.
1. Failing to Define Strategic Objectives
Without clearly defined goals—such as maximizing liquidity, minimizing risk, or funding future growth—physician-owners may agree to lease terms or sale structures that do not align with their long-term business needs.
2. Underestimating the Lease’s Impact
The lease agreement is the foundation of a sale-leaseback. Unfavorable terms—such as excessive rent, short lease duration, or weak renewal options—can limit operational flexibility and reduce the ASC’s future value.
3. Not Using Healthcare-Specific Advisors
General real estate brokers and attorneys may lack the specialized knowledge required for healthcare transactions. ASC sale-leasebacks involve regulatory and operational nuances that require experienced healthcare real estate professionals.
4. Accepting the First Offer
Many physician-owners are tempted to accept early unsolicited offers without exploring the market. This often results in below-market pricing and unfavorable terms. Running a structured, competitive bidding process is essential for achieving full value.
5. Overlooking Regulatory Compliance
Fair Market Value (FMV) and commercial reasonableness are critical in sale-leasebacks to comply with federal anti-kickback statutes. Failing to meet these standards can lead to legal and financial penalties.
6. Misjudging Timing and Market Conditions
Attempting a sale-leaseback during a market downturn or without properly preparing financial and property data can reduce buyer interest and lead to underwhelming results.
Conclusion:
A successful ASC sale-leaseback balances immediate financial gain with long-term operational control. By focusing on the right elements—strategic goals, strong lease terms, and experienced advisors—physician-owners can unlock the full value of their real estate while securing the future of their surgical practice.
A well-executed sale-leaseback can provide physician-owners with liquidity, strategic flexibility, and long-term facility control. By following a disciplined process and partnering with experienced advisors, ASC owners can achieve a successful outcome that supports both their financial and operational goals.
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. .