By Rus Gudnyy
It’s hard to open a healthcare publication these days without seeing articles about artificial intelligence and the need for providers to adopt technology solutions that improve patient care and operational performance. While these innovations are undeniably important, many health systems, hospitals, and provider groups often overlook another critical strategy that directly impacts their financial health and competitive position: their real estate.
For years, healthcare organizations have viewed real estate as an asset to hold indefinitely—valuable but largely untapped. However, in today’s changing environment, many providers are reconsidering whether owning their properties is the best use of capital.
What Changed?
Several factors are driving a shift in healthcare real estate strategy:
- Financial Pressures Are Increasing: Rising costs and shrinking margins have tightened operating budgets, making it crucial to allocate capital wisely.
- Care Delivery Is Moving Off-Campus: The trend toward outpatient care has accelerated, with 80% of new medical office buildings now being developed away from hospital campuses in residential and retail areas, according to CBRE.
- Borrowing Costs Have Risen: Higher interest rates have made access to capital more challenging, pushing organizations to find alternative ways to fund growth and expansion.
Given these realities, many healthcare real estate experts predict that the trend toward monetizing medical office properties will accelerate in 2025. If your organization is evaluating how to optimize its financial performance, here are key reasons to consider selling all or part of your real estate holdings.
Unlocking Capital for Growth
Selling real estate assets provides an influx of capital that can be reinvested into strategic priorities—such as expanding service lines, upgrading technology, and enhancing patient care—rather than being locked in brick and mortar.
Strengthening Financial Stability
A stronger balance sheet improves liquidity, which not only helps fund daily operations but also enhances resilience against market fluctuations. A more favorable credit rating can reduce borrowing costs and open doors to more competitive financing options, making it easier to navigate today’s financial landscape.
Fueling Expansion and Market Positioning
By converting owned real estate into low-risk, readily available capital, health systems can accelerate growth, expand their outpatient footprint, and compete more effectively in new markets—all without taking on additional debt.
Reducing Legal and Compliance Risks
Selling real estate and leasing it back can help minimize regulatory scrutiny related to lease agreements and avoid unintentional violations of Stark Law and the Anti-Kickback Statute—both of which impose strict rules on financial relationships between providers and landlords.
Focusing on Patient Care, Not Property Management
Managing real estate requires time, resources, and administrative oversight that can distract from an organization’s core mission. Selling non-essential properties allows healthcare leaders to redirect their focus to delivering high-quality care and operational excellence.
In the next issue of the PracticePLUS blog, we’ll discuss some of the most important considerations to keep in mind if you’re exploring a sale of your medical office properties.
Rus Gudnyy is Senior Vice President for Investments for Montecito Medical.
