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A sale-leaseback is a transaction in which a physician or medical practice sells the building they own and simultaneously executes a long-term lease to remain as a tenant. The physician receives an immediate capital event — monetizing the real estate equity built over years of ownership — while continuing to occupy and operate from the same facility. Sale-leasebacks are attractive when a physician wants to redeploy real estate capital into their practice, personal investments, or retirement; when a practice is approaching a sale and wants to separate real estate from the transaction; or when estate planning objectives benefit from liquidity. The lease terms negotiated at the time of sale — including rent, escalations, renewal options, and NNN structure — determine the long-term financial outcome for both parties.

Medical office building valuation is primarily driven by income capitalization — dividing the property’s net operating income (NOI) by the prevailing cap rate for comparable assets in the market. NOI equals gross rental income minus operating expenses (excluding debt service). Cap rates for MOBs vary by tenant credit quality, lease term, location, and asset type. Secondary valuation methods include replacement cost analysis and comparable sales. For owner-occupied buildings where the physician is both the owner and the tenant, the lease rate imputed to the sale-leaseback structure — and its defensibility relative to market rents — is the most critical factor in determining value. Our valuation process uses current transaction data across all active markets to establish a defensible pricing range before going to market.

Several factors signal an optimal disposition window: cap rates are near cycle lows, meaning buyers will pay more for the same income stream; your lease term is long enough to attract institutional buyers (typically 10 or more years remaining); the property is fully occupied with strong clinical tenants; and market conditions in your submarket are favorable. From an owner’s perspective, the right time often aligns with a practice transition — selling the real estate at the same time as, or in advance of, a practice sale prevents the two transactions from complicating each other. We provide disposition timing analysis as part of every initial owner conversation, with current cap rate data and market conditions context.

An open market process involves actively marketing the asset to a broad buyer pool — REITs, medical office funds, private equity, family offices, and 1031 exchange buyers — using a structured offering memorandum and competitive bid process. A private sale targets a specific buyer or small group of buyers directly without broad market exposure. Open market processes typically generate higher pricing through competitive tension. Private sales offer confidentiality and speed, which may be important when the seller is a practicing physician who does not want patients or staff to learn the building is for sale. We offer both approaches and often recommend a hybrid — targeted outreach to our institutional buyer network before a full market launch — to test pricing while maintaining initial confidentiality.

While it is possible to sell a medical office building without representation, unrepresented sellers consistently achieve lower sale prices and less favorable terms than those with experienced advisors. The reasons are structural: buyers and their representatives negotiate medical office transactions every day, while most physician-owners complete one or two such transactions in a career. Gaps in market knowledge, buyer qualification, due diligence management, and negotiating tactics compound over the course of a transaction to produce materially different outcomes. The cost of representation is a brokerage commission, which in most cases is offset many times over by the pricing improvement a structured, competitive process produces relative to a direct or single-buyer sale.