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ASC Real Estate Sells for Above Appraised Value

November 11, 2021

Written by Jim Freund
ASCs Inc. Senior Partner

ASC Real Estate Sells for Above Appraised Value

November 11, 2021ASCs Inc. and JH Winokur, Inc. are pleased to announce the closing of an ASC real estate sale-leaseback transaction for the Freeman Health Surgical Center located in Joplin, Missouri.   The 17,400 square-foot center features four fully-equipped operating rooms, one swing room, and one procedure room with the latest medical instrumentation. The surgery center is equipped for general, gynecological, hand & microvascular, neurosurgery, orthopedic, otolaryngology, pain management, gastroenterology and urology surgical cases.

The property is on the campus of the locally owned, not-for-profit and nationally recognized Freeman Health System and includes Freeman Hospital West, Freeman Hospital East, Freeman Neosho Hospital and Ozark Center – the area’s largest provider of behavioral health services – as well as two urgent care clinics, dozens of physician clinics and a variety of specialty services.  U.S. News & World Report ranked Freeman No. 14 in the state for the seventh consecutive year and No 1 in Southwest Missouri.

The surgery center business is majority owned by Freeman Health.  With more than 300 physicians on staff representing more than 70 specialties, Freeman provides cancer care, heart and vascular care, neurology and neurosurgery, orthopaedics, children’s services and women’s services. Additionally, Freeman is the only Children’s Miracle Network Hospital in a 70-mile radius.

The physicians owned the real estate and the sale was made using the existing lease and rent so there was no change in the financial performance of the ASC,  "One of the most important considerations for physician-owners of ASC real estate is the impact the sale, lease and rent rates will have on the on the total value of their assets, which in this case included interests in both the surgical facility and ancillary services," states ASCs Inc.Managing Partner Jon Vick.  "Local real estate brokers simply don't have the knowledge, expertise or experience to address this during the sales process."

ASCs Inc. advised the sellers along with broker J.H. Winokur Inc.  The transaction resulted in a selling price that exceeded the seller's expectations and was well above the value of a recent bank appraisal.

Many ASC owners are considering the sale/leaseback of their ASC real estate to provide liquidity and a source of capital for diversifying their assets during periods when ASC income is impacted by unforeseen events, such as the COVID pandemic.

JH Winokur, Inc. (914-997-9200; www.jhwinokur.com) and ASCs Inc. (760-751-0250; www.ascs-inc.com) provide strategic partnering and ASC/MOB real estate advisory services to physician-owners of ASCs and medical real estate.

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