ERE Healthcare Real Estate Advisors (“ERE”) is pleased to announce the successful sale of a 25,762 SF ASC and urology facility serving southwest Georgia. The practice is the highest performing urology center in a 50-mile radius and commands the majority of the patient volume in the region. The practice and real estate partnerships were originally formed by four physicians, but two eventually left to due to retirement or to pursue practice elsewhere.

With half of the partnership departing, the two remaining physicians were forced to buy out their ownership, increasing the debt, personal liability, and operational responsibility of the active providers.  Additionally, as with most practices, the only candidates eligible to invest in the real estate were physician partners of the practice. With the increasing difficulty of recruiting physicians, compounded by requirements of new providers to buy into the practice, surgery center, and real estate in a smaller market, the physicians’ future exit strategy was uncertain.

ERE was engaged to explore a sale and leaseback with the goal of allowing the physicians to exit their real estate at a premium value, while continuing to operate uninterrupted, and with flexibility for the practice moving forward.  By strategically timing the transaction, while the partners owned the largest share of the real estate and practice (50/50), the physicians were able to capitalize on historically strong market pricing and with straightforward partnership consensus.  Additionally, simultaneous with the sale, the partners were successful in recruiting a new employed physician, reducing their individual overhead expense.

Conducting a proprietary Call for Offers process, ERE generated 10 competitive offers.  During the process, ERE identified the most aggressive buyer, who was also familiar with the urology space and could execute a timely closing before year-end.

The transaction was led by Collin Hart and Marc Flynn.

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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.