Advice Needed for Medical Lease-Back

[Account Closed]

Hey all,

I have the opportunity to work as an scout for a group that wants to buy 100-150mil in very secure medical lease-backs. This is not an ad, I'm not interested in solicitations, I just need advice that pertains to this scenario.

Further information is that the investors want to find medical practices between NY and Georgia (just coastal states,) with no rural areas. The minimum size property they'll consider is 5mil. Finally, they're looking for a cap rate of 6.75.

My question as it relates to this scenario is: how would you go about scouting out properties for this group? Although I work as a commercial real estate analyst for a self storage company (which does brokerage/investing/consulting,) and have some ideas, I'd really like to get your thoughts, in order to do this in the most effective way.

Looking forward to what everyone has to say!

[George Flevotomos]

Howard is right. This won't be easy, but nothing worth doing is. Many practices of that size are being either bought out or partnering with hospitals and in many cases the hospitals are not interested in the real estate. Usually these are being sold off-market to local well connected investors. I recently purchased two medical office buildings and they were off-market transactions.

One solution would be to meet with the most active brokers for MOB in each county you're targeting and enlist them to locate deals for you. Make sure they understand what your needs are and the perimeters of what properties meet your criteria. 

Another way may be direct mail. Get a mailing list of Medical practices with the names of their managers and visit, call or send a letter to them with an offer to do a sale-leaseback.

Good luck!