Physicians and developers of de novo ASCs are often faced with the decision to either buy and develop their ASC real estate or to lease space in an existing MOB. The data supporting buying and developing the ASC real estate are clear and compelling.
When you buy and develop the ASC real estate you build tremendous value into the property; when you lease space to develop your ASC you are putting money into the real estate owner’s pocket, not into your own.
Buying the real estate with an entity separate from the ASC business allows you to legally involve referral sources in the ownership of the real estate.
Buying the ASC real estate opens the door to a sale-leaseback with an investor who will buy the real estate at fair value and fund the development of the ASC thus greatly reducing the capital required from the physicians and eliminating the long-term debt associated with construction of the ASC, thus increasing EBITDA.
There are many investors and capital partners that will submit competitive proposals to fund ASC property sale-leasebacks and ASC development for surgeons in return for a long-term lease. This is a smart way to conserve capital for operations while obtaining the desired ASC facility.