Medical Office Sale-Leaseback Advisory
Sale-leaseback structuring for physician-owned medical office buildings across the Southeast
We structure the lease, price the asset, and run the buyer process.
If you own the building your practice operates in, you own two assets that get valued in completely different ways. The practice trades on EBITDA. The building trades on the lease.
Most physician owners learn this in the middle of a transaction, when a DSO offers to buy the practice and the real estate together, or when a partner buyout forces a number onto the building. By then the lease is whatever got signed years ago: a short term, below-market rent, the practice as sole guarantor, and no defined maintenance split. That document is what a buyer is actually purchasing, and it is what caps the price.
A deliberate sale-leaseback runs the other direction. We set the rent, term, escalations, guarantor structure, and landlord obligations first, then take the asset to the net lease buyers who price medical office. You keep the space. The capital comes out at a real estate multiple instead of a practice multiple.
Sequence matters as much as structure. Selling the building before, during, or after a practice transaction produces materially different outcomes, and the right order is rarely the obvious one.
Our Sale-Leaseback Advisory Group covers medical office, dental, and specialty practice real estate. We are licensed in Georgia and work with practice owners throughout the Southeast, partnering with licensed brokers in each state where a transaction requires it.
What is a medical office sale-leaseback?
A sale-leaseback is a single transaction with two simultaneous parts: you sell the medical office property you own, and at closing you sign a long-term lease with the new owner to continue operating from the same building.
You walk out of the closing with cash for the full market value of the real estate and a lease that keeps your practice exactly where it is. The building's ownership changes; your day-to-day operations do not.
How the transaction works
Valuation — the property is appraised as a medical office investment, not as a practice asset. This usually produces a higher number than a bank appraisal.
Marketing — the property is presented to qualified medical office investors, including healthcare REITs, private equity healthcare funds, and net-lease investors active in the Southeast.
Lease negotiation — the lease is drafted in parallel with the sale. Lease terms are the transaction. Term length, rent, escalations, renewal options, and maintenance responsibilities are all negotiated before the sale price is finalized.
Closing — the sale and lease sign simultaneously, typically 60 to 90 days from an executed letter of intent.
Why physicians and practice owners choose sale-leasebacks
Convert 100% of your real estate equity to working capital
Traditional financing gives you 65% to 75% of appraised value. A sale-leaseback gives you the full market value of the property at closing. On a building appraised at $4M, that's roughly $1M to $1.4M more capital in your hands the day you close.
Separate the practice sale from the real estate sale
If you're planning to sell your practice to a hospital system, a DSO, or a private equity-backed platform within the next several years, running the real estate through a separate sale-leaseback almost always produces more total value than bundling it into the practice sale. Practice buyers typically don't want to buy real estate, and real estate buyers don't want to buy practices. Trying to close both to the same buyer suppresses the value of one or both.
Separating the two also protects you from the most common failure mode: a practice sale that falls apart at the last minute because the buyer and seller couldn't agree on lease terms for the building.
Fund growth, partner buyouts, or retirement without dilution
Capital from a sale-leaseback can fund:
Practice expansion, additional locations, or a new specialty line
New imaging, surgical, or diagnostic equipment
Partner buyouts or ownership transitions
Retirement portfolio diversification outside of practice and real estate
Paying down practice debt or mortgages
An acquisition of another practice
Unlike a bank loan, the capital is non-dilutive. Unlike equity from a PE partner, you don't give up governance or a share of future practice earnings.
Improve practice financial ratios
Removing the building from your balance sheet often makes the practice look stronger to lenders, potential buyers, and equity partners. Lease payments become deductible operating expenses. The practice becomes more asset-light and, in many cases, more attractive to acquirers.
Continue operating in the same location, with the same team
Nothing changes for your patients, staff, or referral network. You continue seeing patients in the same exam rooms. Your lease locks in your right to occupy the space for 10 to 20 years, with renewal options beyond that.
What the deal looks like
Every transaction is different, but Southeast medical office sale-leasebacks in 2026 typically fall within these ranges:
Deal parameterTypical rangeInitial lease term10 to 20 years, most commonly 15Rent escalations2% to 3% annually, or CPI-linkedLease structureTriple-net (tenant pays taxes, insurance, and most maintenance)Renewal optionsTwo to four 5-year renewal termsClosing timeline60 to 90 days from executed LOI
On pricing: cap rates and annual rent as a percentage of purchase price vary based on tenant credit strength, submarket, deal size, lease term, and property quality. A well-tenanted MOB in a growth submarket priced for institutional buyers looks very different from a smaller practice building priced for local private capital. We provide a preliminary value range at the start of every engagement, benchmarked against comparable Southeast transactions.
The lease is the real transaction. A slightly higher sale price with a bad lease structure will cost you more over the term than a lower sale price with a well-negotiated lease.
Who buys these deals
The buyer universe for medical office sale-leasebacks breaks into four groups. Which one is right for your transaction depends on your deal size, credit profile, and lease preferences.
Healthcare REITs — publicly traded and non-traded REITs focused specifically on medical office. Institutional lease terms, long hold periods, and a preference for established practices with strong financials. Typically pursue larger, well-located properties.
Private equity healthcare real estate funds — more flexible on structure and property condition. Sometimes willing to take on repositioning or expansion opportunities that a REIT would pass on.
Net-lease institutional investors — focused on stable, long-term income. Prefer longer lease terms with creditworthy tenants. Deal sizes vary widely.
Private investors, family offices, and 1031 exchange buyers — very active for smaller and mid-sized deals, especially in the Southeast where local capital is strong. Faster closings, more flexible on terms, but pricing varies buyer to buyer.
Running a competitive process across these buyer groups is what produces the best pricing. A single unsolicited offer rarely represents the top of the market.
Tax treatment
Sale-leasebacks have several tax considerations that should be reviewed with your CPA before you sign an LOI.
Capital gains — the sale generates a taxable gain based on your basis in the property. Long-term rates typically apply if you've held the property more than a year.
Depreciation recapture — the portion of gain attributable to depreciation you've taken is taxed at a higher rate than the standard long-term capital gains rate.
Lease payment deductibility — rent paid under the new lease is fully deductible as an operating expense of the practice, which changes the practice's tax profile compared to paying a mortgage (where only the interest is deductible).
1031 exchange — a sale-leaseback of an operating property to a new owner where you remain the tenant generally does not qualify for a 1031 exchange, because the property you're relinquishing isn't held for investment. Consult your CPA on your specific structure.
This section is general guidance, not tax advice. Every practice's situation is different.
When a sale-leaseback is right — and when it isn't
Sale-leaseback tends to fit well when:
You plan to continue practicing in the current location for at least 7 to 10 more years
You're planning a practice sale in the next 2 to 7 years and want to maximize both the practice value and the real estate value
You have capital needs the building's equity would efficiently address — expansion, partner buyout, retirement diversification, debt payoff, acquisition
The property is well-located and well-maintained
Your practice has stable revenue and a track record institutional buyers will underwrite
Sale-leaseback is usually not the right move when:
You're planning to relocate the practice within 3 to 5 years
You want to preserve future appreciation upside on the building
The building has significant deferred maintenance that would compress the sale price
Your practice has meaningful revenue instability that would concern institutional buyers
You have a specific plan to leave the building to family or partners as part of an estate strategy
Common mistakes practice owners make
Anchoring on sale price instead of lease terms. A high sale price with a lease that suppresses future practice EBITDA is a bad deal. A slightly lower sale price with a clean lease often produces more total value.
Signing employment or non-compete concessions inside the lease. These belong in a separate document, if they belong anywhere.
Choosing the wrong buyer type. A REIT is not always the right buyer. A local private investor or 1031 buyer often closes faster, on cleaner terms, and at competitive pricing for deals under $5M.
Skipping the competitive marketing process. Accepting the first unsolicited offer routinely leaves 10% to 20% of value on the table.
Bundling the real estate into a practice sale to save time. This is the single most common way practice owners lose money on their real estate.
Working with Cumberland & Worthy
Cumberland & Worthy is an Atlanta based commercial real estate brokerage. Our Sale-Leaseback Advisory Group covers medical office, dental, veterinary, dermatology, and specialty practice real estate across the Southeast, including Georgia, with expanding coverage into Florida, North Carolina, South Carolina, and Tennessee.
We advise practice owners on the full sale-leaseback lifecycle:
Discovery and valuation — we assess your property's value as a medical office investment and stress-test the rent, term, and buyer profile before you commit to a transaction.
Buyer identification and marketing — we run a competitive process, marketing the opportunity to REITs, private equity funds, and private investors active in your submarket.
Negotiation and LOI — lease terms, escalations, renewal options, and maintenance obligations are negotiated in parallel with sale price.
Diligence and closing — we manage the transaction through diligence, financing contingencies, and closing, typically within 60 to 90 days.
Our related work: healthcare portfolio management for multi-property practices, medical office brokerage for practices leasing or buying new space, and dental real estate advisory for dental and DSO transactions.
Request a preliminary valuation
If you own your medical office building and are considering a sale-leaseback, the fastest way to know whether it makes sense is a preliminary valuation. Send us the following and we'll come back with a preliminary value range, a range of rent scenarios, and an honest assessment of whether a sale-leaseback fits your situation.
Property address
Building square footage and current condition
Approximate current annual practice revenue (helps us assess tenant credit)
Current mortgage balance, if any
Reason you're exploring a sale-leaseback (growth capital, practice sale prep, retirement, debt reduction, other)
Your target timing