Healthcare sale leasebacks are one of #CRE’s best kept secrets.
The upside potential is great, and achieving it is simple.
Best part, your tenant does all the work.
🧵
To understand this, let’s look at a couple trends in healthcare -
1) PE-backed groups are rapidly acquiring medical practices all over the country
2) Hospital system M&A activity hit an all-time high in 2022
Pretty much, hospitals and PE firms are on a buying spree!
However doctors aren’t the only ones gaining from their hard work…
Real estate investors are too!
When a doc group sells their practice, the RE owner gets what’s called a “credit enhancement.”
This is where the upside part comes in.
What was once a lease to a private practice, is now one to a PE-backed company or health system.
This is huge!
Why? Answer this.
What’s the difference in value b/w a corporate lease and mom & pop one?
125 bps? 150 bps?
That 15 year dental deal you bought at an 8 cap? Now its a 6.5 cap.
This is one of the strongest cases for buying healthcare RE.
Ride the consolidation wave.
Buy deals leased to well-performing dentists, veterinarians, surgeons, etc. that are prime for acquisition.
Sit on it and have your property value increase overnight.
Consider this the next time you’re in the market for a value-add deal.
But remember to please keep this between us! 🤫
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