Veterinary Clinic Sale Leaseback
Ever wonder how your veterinary clinic could benefit from a sale leaseback? If you have an operating clinic and you also own your real estate, then a sale leaseback could be a great option when you’re ready to raise capital for business growth, to pay down debt, or to sell your real estate due to a business sale.
We help veterinary clinic operators unlock their real estate equity.
Advantages of a Sale Leaseback for Veterinary Clinics
If you operate a veterinary clinic that also owns real estate assets, there are many great advantages to pursuing a sale leaseback transaction. There are also some disadvantages too, so it’s important to understand what your business goals are, and these goals will help determine whether a sale leaseback is right for you.
Benefits of a sale leaseback for the lessee/seller
- You could quickly unlock any equity that’s “stored” in your real estate to help grow your clinic faster.
- You decrease your overall operational risk when you no longer own the real estate and that risk now sits with the new owner
- You can improve the health of your business balance sheet by trading your mortgage (liability) for an asset (cash).
Benefits of a sale leaseback for the lessor/buyer
- They get a lease that is guaranteed by the tenant business
- They get a consistent and predictable stream of income for a long period of time
- They get a fair return on their invested capital
As you can see from these benefits, a sale leaseback can be a truly win-win scenario for both you, the clinic owner, and the buyer/investor alike. While there are many details that both parties need to agree on, such as the lease length, monthly payments, etc, the sale leaseback transaction provides many advantages and is a useful tool you should consider if you are looking to raise capital quickly for your veterinary clinic.
Veterinary Clinic Sale Leaseback Examples
While there are many sale leaseback examples, here are a couple that should give you a clearer picture of why might choose to do a sale leaseback with your veterinarian clinic real estate.
Example 1: Vet Clinic Expansion
Laura owns 2 veterinary clinics in Minnesota. She was offered an opportunity to purchase two nearby clinics as the current veterinarian/owner was retiring. Laura researched what it would take to finance the purchase of the two new locations and realized that she would be able to purchase both locations without financing if she simply sold the real estate from her current clinics in a sale leaseback transaction, freeing up the capital she has built up over the years. This allowed her to purchase the new locations without taking on any new debt and actually improved her balance sheet in the process as she removed mortgage debt and increased her assets all at once. She came to an agreement with an investor and sold her clinic’s real estate and immediately signed a 15 year lease to remain and continue to operate her initial locations as before.
Example 2: Vet Clinic Sale
Brandon owned and operating 4 successful veterinary clinics in Dallas Texas for over two decades and was now interested in retiring. He was dedicated to passing on the clinics to a veterinarian who had been working alongside him at the clinics for many years and who was excited to take over the operation. But, Brandon wanted to unlock his equity he had built up in the four clinic locations before he sold the business. He owned three of the properties free and clear and only one still had an active mortgage. He decided that a sale leaseback transaction was the cheapest and quickest way to sell his real estate and allow the clinics to continue to operate for years to come with the new ownership in place. He found an investor who was willing to purchase the real estate for fair market value and immediately after the business sale happened, Brandon sold the real estate and the new veterinarian owner signed a longterm lease that would keep the clinics operating far into the future.
Hopefully, these two examples give you a better picture why you might consider a sale leaseback to unlock your veterinary clinic real estate equity.
While there are plenty of commercial real estate brokers who would offer to help when you are ready to think through a sale leaseback for your Veterinary clinic real estate, there are actually few companies that specialize in the sale leaseback process. These select few companies, like SaleLeaseback.co work directly with vet clinic operators to buy real estate directly from you, the owner, with zero fees. We help you think through your options and potential pitfalls associated with a sale leaseback transaction for your particular situation. So, if you are considering a sale leaseback to raise funds for your clinic, start by letting us give you a free offer for your real estate.