Montecito Physician Real Estate Program (PREP): A Track Record of Wins/Wins

 

Case Study: Orthopedists Earn $1.16 Million Profit

 

Background: In 2016, Montecito acquired a medical office property from an orthopedic group that ranks as a dominant provider in its state. The group employs nearly 150 physicians across 45 locations.

 

PREP Participation: Physicians in the group reinvested a portion of the proceeds of the sale back into the property. In the process, they deferred tax liability on amount they reinvested. Their property became part of a larger medical office building portfolio built by Montecito.  In late 2017, Montecito sold the overall portfolio and distributed the returns to the participating physicians.

 

Results

  • The physician group’s investment achieved an internal rate of return (IRR) of 27.44 percent and a multiple of 1.45x.
  • On an investment of approximately $2.6 million, the group earned a total profit of $1,160,100.
  • Physicians in the group have now opted to co-invest alongside Montecito in acquisitions of additional medical office properties.

 

Case Study: Physicians Earn $1.8 Million from Re-investment

 

Background: In early 2015, Montecito acquired two medical office buildings (MOBs) totaling 112,000 square feet from a multi-specialty practice employing approximately 100 physicians.

 

PREP Participation: Physicians in the group reinvested a portion of the proceeds of the sale back into the property. Their property became part of a larger medical office building portfolio built by Montecito. The physicians received quarterly distributions from their investment until the portfolio traded again in 2018, when they received a full return. Meanwhile, they deferred tax liability on the amount they had invested.

 

Results

  • The physician group’s investment achieved an attractive internal rate of return (IRR) of 15.8 percent and a multiple of 1.54x.
  •  On an investment of approximately $3.375 million, the group earned a total profit of $1,822,500.
  • Physicians in the group have now opted to co-invest alongside Montecito in acquisitions of additional medical office properties.

 

Case Study: Provider Group Gets 39% Return

 

Background: In 2016, Montecito acquired a six-building medical office portfolio from a medical practice that, with 150 physicians, ranks as the largest multi-specialty physician group in its market area.

 

PREP Participation: Physicians in the group reinvested a portion of the proceeds of the sale back into the property, deferring tax liability on amount they reinvested. Their property became part of a larger medical office building portfolio built by Montecito.  The physicians received quarterly distributions from their investment until the portfolio traded again, when they received a full return.

 

Results

  • The physician group’s investment achieved an internal rate of return (IRR) of 39.16 percent and a multiple of 1.80x.
  • On an investment of approximately $1.6 million, the group earned a total profit of $1.28 million.
  • Physicians in the group have now opted to co-invest alongside Montecito in acquisitions of additional medical office properties.

 

 

Montecito Medical Real Estate

3100 West End Avenue,
Suite 750

Nashville, TN  37203

© Copyright 2016 - MONTECETO MEDICAL REAL ESTATE

Chris Conk

SVP Acquisitions / Principal

615.921.3850