First, we will have a telephone interview to discuss your goals and timetable, and how we’ll assist you in achieving your goals.
We will analyze your property, lease, and financial statements to determine the saleability of your property and what needs to be done to maximize its value. This typically includes proposing a new lease or modifying your existing lease.
For the listing phase of your real estate transaction, we prepare a comprehensive, professional marketing package that promotes your real estate in the best light to make it attractive to pre-approved, credit-worthy buyers.
We will distribute the marketing package to the best-qualified local and national buyers and solicit and obtain competitive bids, usually within 30 days of distributing your marketing package.
We review, analyze, and negotiate purchasers’ Letters of Intent to get you to the contract phase.
Our team will work with you and the purchaser through the contract and due diligence phase and with both attorneys schedule and coordinate the closing, typically within 60-90 days of the contract signing.
What is a Sale-Leaseback?
Often, veterinarians own not only their practice but the real estate as well. And, equally as often, the owners do not realize how valuable their real estate has become.
Vets who own their animal hospital real estate have an opportunity to do a sale-leaseback transaction to take some meaningful cash off the table. A sale-leaseback is an arrangement in which the vet sells their real estate and their practice, then leases it back from the purchaser. With a sale-leaseback the details of the arrangement, such as the purchase price, lease payments, and lease duration are made prior to the sale of the real estate. The seller of the property becomes the tenant and the purchaser becomes the landlord.
The vet gets the cash and retains control of the property in order to continue operating their business through a NNN lease. The cash can be used for any purpose, including buying other diversified assets.
An Example of a Sale-Leaseback
A veterinarian owns a 10,000-square foot animal hospital and is paying rent at $25/sf or $250,000 a year. This is considered income, so the vet is paying income tax on the rent. In a sale-leaseback transaction, a buyer pays the vet a cash purchase price of $3.5 million (using a 7% CAP rate) and the practice signs a new 12-year NNN lease at $25/square foot, plus annual 2.5% rent increases, with multiple options to renew. The vet retains control of the property, pays rent to the new owner of the property, and continues to be responsible for taxes, insurance and maintenance (NNN lease). The vet can buy another income-producing property that generates more than twice the annual ROI while deferring capital gains taxes through a 1031 exchange.