With increasingly complex procedures moving to ASCs, many physician-owners and administrators are finding that their capacity is already stretched to the limit and scheduling is becoming more difficult. Many ASCs need more operating rooms to handle current and projected business, including larger ORs that can fit microscopes, C-arms and extension tables some specialties require.

Adding ORs or upgrading existing facilities will prepare your ASC for the future, but it takes time and money. If your ASC is nearing capacity, now is the time to plan for expansion or renovation to take advantage of the projected increase in outpatient procedures. Smart ASC operators will take advantage of this opportunity sooner rather than later.

Real estate investors will buy the ASC real estate and provide the funding for renovating the ASC and adding ORs, and lease the real estate back to the ASC. The investor’s return will be generated by the rent on the expansion. A sale-leaseback transaction is an alternative to paying cash or taking out a loan to pay for ASC expansions. Real estate investors can also fund the construction and development of additional facilities.

The parties that sell the ASC real estate have full control to negotiate a beneficial long-term lease prior to closing. The owners sell the property to real estate investors for a competitive market rate and receive cash for the market value of the property sold and the capital they need for the expansion.

The benefits of such an arrangement to the ASC and its physician-owners are legion. The ASC can expand its OR space to grow its business without taking on more debt or providing personal guarantees for a new loan. The increased capacity facilitates more procedures, revenue and profits.

The benefits of an ASC real estate sale-leaseback include:

• Upon closing, sellers receive cash
• Sellers can maintain full operating control
• Pay down existing debt, remove loan guarantees
• Ability to lower rent & increase EBITDA
• Facilitates adding new partners
• Remain minority partners in the real estate
• Provides capital to modernize or expand facility

For more information on ASC sale-leasebacks please contact Jason Winokur at (914) 216-3574 or Jon Vick at (760) 291-7745.

Jason Winokur is the vice president and broker for ASC Realty Advisors and can be reached at jwinokur@ascrealty.com. Jon Vick is the founder of ASC Realty Advisors and can be reached at jvick@ascrealty.com. Their website is: www.ascrealtyadvisors.com