Every Location. Every Metric.
One Integrated Strategy.

A multi-site group should manage lease renewals as a portfolio strategy, not as individual transactions. Key principles include: staggering expirations so renewals do not all occur in the same year, preserving optionality at each location by never allowing a lease to lapse into holdover, using the group’s multi-location scale as negotiating leverage with landlords in shared markets, and conducting a performance assessment of each location — patient demographics, payer mix, RVU productivity, and occupancy cost as a percentage of revenue — before committing to any renewal. A unified portfolio view, maintained 24 months in advance of every expiration, is the foundation of an effective multi-site real estate strategy.

The most actionable real estate performance metrics for multi-site physician groups include: occupancy cost as a percentage of location revenue (specialty benchmarks range from 4 to 10 percent); cost per productive exam room comparing total occupancy cost to active exam room count; payer mix by location compared against the group’s targets; patient demographic alignment between the location’s catchment area and the practice’s target population; RVU productivity per physician by site where applicable; and year-over-year patient volume trends by location. These metrics together reveal which locations are generating returns commensurate with their real estate investment and which may warrant renegotiation, consolidation, or exit.

A healthcare real estate portfolio audit is a comprehensive review of every location in a multi-site group’s footprint — evaluating lease terms, expiration schedule, rent-per-square-foot versus market benchmarks, clinical performance metrics, and strategic alignment of each location with the group’s growth plan. Groups should conduct a formal audit when entering a merger or acquisition, when preparing for a practice sale or partnership transaction, when a new management team or CFO takes responsibility for operations, or when the portfolio has grown through acquisition and lease terms have never been standardized. We conduct portfolio audits jointly with Clinical Advisory to ensure real estate costs are evaluated alongside practice EBITDA and enterprise value.

Payer mix directly affects how much occupancy cost a location can support. A practice generating high commercial and Medicare Advantage revenue can sustain higher rent per square foot than one dependent on Medicaid or self-pay, because the revenue per patient visit is substantially different. When evaluating a new location or a lease renewal, we analyze the payer mix of the surrounding patient population — not just current patients — to ensure the demographics support the real estate commitment over the full lease term. For groups with multiple locations, payer mix variation by site is one of the most important factors in determining whether each location warrants lease commitment or strategic consolidation.

Before a transaction, a physician group’s real estate portfolio should be audited for four issues that commonly affect enterprise value: above-market rents that compress EBITDA; leases with unfavorable renewal terms that create occupancy risk; physician-owned real estate that needs to be structured for a sale-leaseback; and lease terms that expire within 3 years of closing, which buyers treat as operational risk. Buyers and private equity investors scrutinize real estate leases carefully during due diligence. Groups that have addressed these issues proactively — with optimized lease structures, market-rate rents, and clean renewal provisions — present a significantly cleaner transaction and command better valuation multiples.