ERE Healthcare Real Estate Advisors (“ERE”) is pleased to announce the successful sale of a 6,352 SF portfolio consisting of 2 ophthalmic assets, both clinical and surgical.  The Seller is a comprehensive ophthalmology practice serving the High Desert region of Southern California, including Apple Valley and Victorville.  As the dominant provider of ophthalmic care in the region, along with having recently constructed a new ambulatory surgical center, the practice was a prime candidate for private equity consolidation.

Despite substantial market share, the founding and sole physician partner was at the end of his career, seeking retirement.  While most private equity backed MSO’s would not pursue such a scenario, the founder’s new ASC was in the heart of a target market for a prominent regional eyecare platform.  With limited durable EBITDA to “sell,” the physician’s practice broker had secured an offer to purchase the assets and (limited) goodwill of the practice and ASC operation.  Still, the physician owned two facilities, one housing the practice, the other the ASC, which could carry substantial value if properly structured.  To complicate matters, the assets of the business were encumbered by the real estate mortgage in the form of SBA financing, tying the closing of the practice sale to a successful real estate transaction.

ERE Healthcare Real Estate Advisors (“ERE”) was engaged by ownership to structure the best possible outcome on the 2 owned locations.  With ERE’s early involvement in establishing rental rates as part of the practice’s EBITDA calculations, the financial terms had already been agreed upon, which left only the leases to be negotiated.  Interfacing directly with the private equity buyer and their counsel, ERE orchestrated the lease negotiation, focusing on the owner’s need to sell the real estate, but with consideration for the objectives of the private equity backed MSO, creating a win-win outcome.  Sourcing a real estate buyer with high certainty of execution, ERE provided the key to unlocking the transaction, facilitating a successful real estate sale, releasing the practice assets as collateral for the mortgage, and allowing the practice transaction to close.  The series of events took months to coordinate, but all occurred simultaneously, satisfying the needs of the physician owner, private equity investors, and real estate buyer.

The transaction was led by Collin Hart.

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Investment demand, sale transaction volume, and valuations for healthcare real estate have reached historic highs. Even if a real estate sale doesn’t meet your current objectives, addressing potential partnership challenges early will maximize the value and security of your investment.