The market for selling medical real estate is currently excellent, and there are multiple buyers interested in bidding on good quality properties. The potential buyers include healthcare Real Estate lnvestment Trusts (REITs), private investors, private equity firms, and real estate investment companies.
What makes a “good quality property” from a buyer’s perspective? Most buyers want to invest in properties of a certain scale, usually the larger the better. In most cases, properties of 10,000 square feet or more will elicit the most interest and will attract buyers with the most capital to invest. Location, of course, is important with properties in affluent, highly populated areas being the most attractive, although we have seen fully leased properties in small towns attract excellent offers. Fully leased properties, with tenants that have profitable businesses and a good balance sheet, are most attractive to buyers. Many buyers will not require personal guarantees of the lease if the businesses are strong. Most important is to price the property at fair market value based on rent that will generate a return for the buyer that makes the real estate an attractive investment. Today, most real estate investors want to buy at a price that returns 7% to 8% (cap rate) on their investment.
If you have been thinking about selling your ambulatory surgery center real estate or medical office building, this is an opportune time to seek purchase proposals. We recommend obtaining bids from at least three potential buyers so that you have negotiating power, and that you work through a broker who specializes in medical properties and will discount the brokerage fee.