Who's Selling Medical Real Estate?
As a follow up to HREA’s Who’s Buying Medical Real Estate, it’s worth understanding the breakdown of Who is Selling Medical Real Estate throughout the U.S. along with the circumstances that are driving these transactions.
The year-over-year sale volume activity depicts a consistent increase of real estate transactions by physician-owners. Whether addressing succession planning or capitalizing on historically high valuations, physician practice groups are deciding to explore various liquidity strategies, and in particular, the Hybrid Sale-Leaseback, which allows for both a sale and continued physician-ownership in the real estate.
Providers who own and occupy their medical real estate are increasingly seeing the benefits from selling or partially selling and unlocking the value that has been created from their practice, achieving unprecedented valuations ranging from 15x – 18x EBITDA. This compares favorably to the multiples that are being achieved by monetizing their practice operations by a factor of nearly 2 times.
Another common trend we are seeing is private equity investors making up over 50% of the sales volume.
This is primarily due to these investors aquiring indivdiual assets and rolling them into a large medical portfolio that will eventually be sold to a REIT or larger private equity group. HREA’s knowledge to discern between long-term patient capital and short-term “flip” mentaltity is invaluable.
% of Sale Volume by Ownership Type
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