In today’s healthcare market, competing for clinical and administrative talent is essential to remaining viable. Capital budgeting in a world where critical levels of staffing remain a daily crisis becomes near impossible and the trade-off between recruitment, retention and remaining competitive versus quality facilities are putting downward pressure on health systems and medical groups.
It has never been more relevant to unlock capital and create liquidity. Many healthcare organizations can unlock the value of illiquid assets by using a vehicle like a sale-leaseback to turn CapEx into OpEx.
What do you get with a sale-leaseback?
- Access to immediate cash for your asset(s), enabling you to refine your balance sheet and leverage that capital for other operational needs in your organization.
- Continue to occupy the space, eliminating the need to introduce change to your local staff, providers, and patients.
- Retain the ability to control and make improvements on your existing space.
- Many states allow healthcare organizations to write off their entire rent payment.
While the above is certainly not an exhaustive list of the benefits of a sale-leaseback, it is important to work with a sale-leaseback partner who understands the evolving healthcare landscape and intricacies of your practice and those that come with ownership and occupancy of a medical office building.
Sale-leasebacks can also introduce other opportunities like options to buy back property after a lease term.
If your organization is looking to unlock the full value of your real estate assets to create working capital that can be used to reinvest into your organization’s operational needs, consider what a sale-leaseback might look like.
What would you use your freed up capital for?
MM2 is a Boston-based healthcare real estate investment firm with the mission of expanding access to community-based medicine for every person in America. We provide capital to support public health and equal access to care in the community, using real estate as a vehicle to support that mission, but a healthcare provider lens to deliver upon it.