The ASC Sale-Leaseback Opportunity

by Coy Davidson | February 9, 2026

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Why more Ambulatory Surgery Center Owners are Monetizing Real Estate

For Ambulatory Surgery Centers (ASCs) seeking to unlock capital and maximize valuation, the sale-leaseback has emerged as a preferred financial strategy.

In this arrangement, physician owners sell their real estate assets to an investor while simultaneously signing a long-term lease, typically 10 to 15 years on a Triple Net (NNN) basis. This allows the practice to retain full operational control while liquidating the real estate equity.

Key Strategic Advantages:

Immediate Liquidity: The sale converts trapped real estate equity into cash. This capital can be deployed for debt elimination, partner buyouts, facility expansion, or technology upgrades.
Valuation & EBITDA Enhancement: In the current high-interest environment, long-term rental rates are often lower than short-term debt service. Replacing debt with rent can improve cash flow and boost EBITDA. Since ASC valuations are typically a multiple of EBITDA, this move can significantly increase the enterprise value of the operating business.
Control & Timing: Execute the real estate transaction before selling a controlling stake in the surgery center business. This sequence allows physician owners to lock in favorable lease terms rather than having them dictated by a future operating partner.

What Investors Actually Price (It’s Not What You Think)

Here’s where most physician-owners get the economics wrong: they assume the sale price of their real estate is driven by the profitability of their surgery center. It isn’t.

Investors price ASC real estate based on three things: the remaining lease term and structure, the creditworthiness of the tenant, and the rent relative to market. The surgery center’s case volume and EBITDA matter to the extent they indicate the tenant will stay and pay rent for the duration of the lease. But the real estate valuation is a function of the lease, not the operations.

This distinction has enormous practical implications.

Long leases maximize pricing. Properties with 10 to 15 years of remaining lease term and physicians committed to practicing long-term attract the strongest buyer demand and the most aggressive pricing. Investors in this space are currently offering multiples of 14x or more for well-structured ASC real estate, according to industry transaction data.

Short remaining leases destroy value. An eight-year-old facility on a 10-year lease is effectively a two-year lease to a buyer. That dramatically reduces what any investor will pay, regardless of how profitable the ASC is or how beautiful the building looks. Lease term is the single most important variable in the pricing equation.

Rent must be at fair market value. Setting rent too low before a sale is one of the most common and costly mistakes. The property’s value is a direct function of rental income. Physicians who have been paying themselves below-market rent for years (which is extremely common) are inadvertently suppressing the sale price. A market rent analysis before going to market can add hundreds of thousands of dollars to the transaction.

Most physician-owners have no idea how much equity they’re sitting on. The ones who do are cashing out strategically.

The Timing Question Most Physicians Get Wrong

The optimal window to execute a sale-leaseback is 5 to 10 years before retirement. Most physicians wait too long.

The logic is simple: investors want long-term certainty that the tenant will remain in place. A 55-year-old surgeon with a thriving multi-specialty ASC and 12 years of practice ahead represents a very different risk profile than a 63-year-old approaching retirement with no succession plan. The first scenario commands premium pricing. The second introduces uncertainty that buyers discount heavily.

The current environment for ASC real estate monetization is favorable for sellers.

On the demand side, capital is plentiful among real estate investment firms focused on healthcare. Outpatient revenue has surged 45% since 2020 according to Colliers, and complex specialties continue migrating to ambulatory settings. MOB occupancy nationally hit 92.5% in 2025, with many markets above 95%. Investors view ASC real estate as a defensive, essential-service asset class with built-in demographic tailwinds. The appetite is strong.

The Bottom Line

ASC real estate is one of the most underappreciated assets in a physician-owner’s portfolio. The sale-leaseback, executed at the right time with the right structure and the right competitive process, converts that dormant equity into immediate liquidity while preserving operational control.

The physicians who approach this strategically can simultaneously: unlock significant capital from the real estate, improve the EBITDA and valuation of the operating business, lock in favorable lease terms before a future operating transaction, and redeploy capital into higher-returning investments.

If you own an ASC and you own the building it sits in, the single most important question you should be asking right now is not “should I sell?” It’s “what is my property actually worth, and what does the optimal timing look like for my specific situation?

That’s a conversation worth having before the market decides for you.

Frequently Asked Questions

Q: “I’m concerned about losing control. If we sell the building, doesn’t that put us at the mercy of a landlord who could raise our rent or refuse to renew our lease?”

A: This is the number one concern I hear from physician groups, and it’s completely valid. Nobody wants to hand over their building and then get squeezed by an investor five years later.

The good news is that the sale-leaseback structure is specifically designed to prevent that. You’re not selling the building and hoping for the best. You’re selling it with a fully executed long-term lease already in place, typically 12 to 15 years with multiple five-year renewal options built in. The rental rate, the escalation schedule, the renewal terms, and the maintenance responsibilities are all locked in at closing. The investor can’t change them.

In fact, you’ll often have more predictability as a tenant under a well-negotiated NNN lease than you have now as an owner, where a surprise roof replacement or HVAC failure can create a six-figure unplanned expense in any given year.

The critical piece is the lease negotiation itself. The terms you agree to at the time of sale will govern your occupancy for the next 15 to 20 years. This is where experienced healthcare real estate representation makes the difference. Escalation rates, assignment provisions, co-tenancy protections, exclusivity clauses, and early termination rights all need to be negotiated with your long-term interests in mind, not the investor’s. If the lease is structured properly, you have more control and more cost certainty as a tenant than you did as an owner.

The physicians who lose control in these transactions are the ones who negotiate without experienced real estate counsel. Don’t be that group.

Q: “We’re thinking about bringing in a hospital partner or PE group in the next few years. Should we wait to deal with the real estate as part of that transaction?”

A: This is one of the most consequential timing decisions a physician group can make, and the answer is almost always no. Do not wait.

Here’s why. When you sell a controlling interest in the operating business to a hospital system, management company, or private equity partner, the real estate becomes part of their negotiation, not yours. The incoming partner will want to control or influence the lease terms because those terms directly affect the operating economics of the business they’re acquiring. Their interests and your interests will not be perfectly aligned.

If you execute the real estate sale-leaseback first, you lock in the lease terms on your timeline, at your negotiated rates, with your renewal protections in place. When the operating transaction happens later, the lease is already a fixed, known cost in the business. The incoming partner inherits it. They don’t get to reshape it.

There’s also a direct valuation benefit. Remember, ASC enterprise value is typically a multiple of EBITDA. If the sale-leaseback replaces your current debt service with a lower annual lease payment, your EBITDA goes up. If your EBITDA goes up, the multiple the operating buyer pays is applied to a larger number. You’ve effectively increased the value of the business you’re about to sell by optimizing the real estate transaction first.

I’ve watched physician groups leave millions on the table by bundling the real estate and the operating transaction together, thinking it would be simpler. It’s simpler for the buyer. It’s not better for the seller. Sequence matters. Do the real estate first.