A “Strategic Sale-leaseback” is a sale-leaseback of a medical property where the goal of the sale-leaseback is to leverage the property to pay for the development of a new ASC or the expansion or renovation of an existing ASC.
This strategy will be of interest to physicians or physician groups that want to build, expand or renovate an ASC or a MOB without tying up their own capital.
The benefits are:
Minimize capital required from the docs
No new debt or debt service and thus higher cash flow and distributions
No new personal loan guarantees
Physicians retain control with a long term NNN lease
Option to be a minority owner of the real estate
In a “strategic sale-leaseback” an investor group or capital partner buys the real estate and, as part of the real estate transaction, also provides funding for the development of the building, the ASC or MOB in return for a long-term market rate lease.