Want to Sell Your ASC Real Estate?

Having worked with hundreds of surgery centers, endoscopy centers and their physician-owners over the past thirty years we have met many physicians who own their ASC/Medical Office Building (MOB) real estate and who, at some point in their careers, have an interest in selling the real estate to free up cash and realize the often very substantial increase in value. The current low interest rate environment, which maximizes ASC real estate value, is the right time to think seriously about selling.

Our real estate division has the unique ability to accurately gauge your facility’s value, inspect your property and design an exceptional marketing package. We then market this to a network of buyers who are focused on acquiring ASC/MOB real estate nationwide to get our clients the best possible price in a timely and professional manner. Most ASC properties that we market receive cash offers from qualified buyers within 30 days.

How to Maximize the Value of Medical Real Estate

The market for selling medical real estate is currently excellent, and there are multiple buyers interested in bidding on good quality properties. The potential buyers include healthcare Real Estate lnvestment Trusts (REITs), private investors, private equity firms, and real estate investment companies.

What makes a "good quality property" from a buyer's perspective? Most buyers want to invest in properties of a certain scale, usually the larger the better. In most cases, properties of 10,000 square feet or more will elicit the most interest and will attract buyers with the most capital to invest. Location, of course, is important with properties in affluent, highly populated areas being the most attractive, although we have seen fully leased properties in small towns attract excellent offers. Fully leased properties, with tenants that have profitable businesses and a good balance sheet, are most attractive to buyers. Many buyers will not require personal guarantees of the lease if the businesses are strong. Most important is to price the property at fair market value based on rent that will generate a return for the buyer that makes the real estate an attractive investment. Today, most real estate investors want to buy at a price that returns 7% to 8% (cap rate) on their investment.

If you have been thinking about selling your ASC/MOB real estate, this is an opportune time to seek purchase proposals. We recommend obtaining bids from at least three potential buyers so that you have negotiating power, and that you work through a broker who specializes in medical properties and will discount the brokerage fee.

  • Selling ASC Real Estate: 5 Things to Know for Flawless Transactions

    • Becker's ASC Review | March 24, 2014

      Ambulatory surgery center physicians often own the ASC's business and real estate. "Over the last year the stars have aligned so that owners of ASC/medical office building real estate can now sell at a very attractive price, get cash for their real estate, lease back the ASC at market rate rent and realize significant tax advantages," says Jonathan Vick, founder and president of ASCs Inc.

      Mr. Vick explains why the current climate is favorable for real estate sale and the steps physician-owners can take to complete a smooth transaction.
      Read more →

  • What ASC Physician-Owners Need to Know About ASC Real Estate Sales & Leasebacks

    • Becker's Hospital Review | May 07, 2014

      Oftentimes ambulatory surgery center physicians own not only their center, but its real estate as well. Jonathan Vick, founder and president of ASCs Inc., answers questions on successfully selling ASC real estate and obtaining favorable leases for the buildings.

      Question: When does it make sense for ASC physicians to consider a lease back transaction for their center?
      To find out the answer to this question, and more, click here. →

  • What Do ASC Buyers Look for in Potential Acquisitions?

    • Becker's Hospital Review | February 10, 2014

      Jon Vick of ASCs Inc. gives a detailed picture of the ambulatory surgery center buyer's market, what qualities buyers look for in potential ASC acquisitions and how ASC leaders can position their centers to attract the right buyers.

      Question: Who are the primary buyers in the current ASC market?
      To find out the answer to this question, and more, click here. →

Three suggestions to increase the value of your medical real estate

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Establish your rent at the highest possible fair market value rate.

The value of medical real estate is determined by the rental income, so the higher the rent the more valuable your property. However, rent must be fair market value, so set a rent that is comparable to similar medical properties in the market.

Leases should be triple-net:

Tenant is responsible for net real estate taxes, net common area maintenance, and net building insurance- i.e. "triple-net". Leases should be for 10- or 12-year terms with two or more 5-year options to renew; leases should include 2% to 3% or CPI "bumps" each year.

Timing:

If you need to rewrite your lease to include these terms, do so before you partner with an ASC management company or a hospital. While it is very beneficial to have a deep-pocketed corporate or hospital partner as a guarantor of the lease, it is very difficult to get your corporate partner to agree to a higher lease rate and other terms that will increase the value of your property after the partnership has been formed.