With strong competition among real estate firms to purchase ASC/MOB real estate, an increasing number of these real estate investment companies and firms are offering physicians the opportunity to remain as minority real estate owners post the sale. This allows for physician sellers to receive full market value for their real estate while continuing to have ownership.
This real estate partnership structure works great for physician group where some physicians do not want to sell the real estate and others want to receive the cash proceeds from a sale. A typical example is in situations where younger physician partners want to own the real estate and older physicians want to “cash out”. In these cases, the price per share in the real estate entity can be an issue. Using an appraisal method does not fully capture what a facility can garner in the open through a long-term NNN sale-leaseback. By bringing in a third real estate party who pays the full market value, the older physicians are able to cash out at a price they are happy with while the younger partners can buy into the real estate.
If the third-party real estate company has a low cost source of capital, they can often leverage the property with debt at a low cost that greatly brings down the buy back in cost per share of the real estate. In that case, both the physicians buying back into the real estate and those exiting the real estate come out happy with the result.
The third-party real estate companies that offer minority co-ownership or re-investment back into the real estate often make for great partners to the physicians. They typically fund expansions, renovations and the development of additional locations. They seek partnerships with physicians as a way for all parties to remain engaged in the real estate and grow their businesses together.
