Provider Real Estate Partnership (PREP)

How to sell your medical office building and remain an owner — the Montecito way

Montecito pioneered a unique approach to medical real estate transactions that we call PREP — Provider Real Estate Partnership — that allows physicians to maintain ownership in buildings they sell to us. That way, they become partners rather than just participants in a deal. PREP is one of the ways we build long-term, mutually beneficial relationships, taking care of the physicians who take care of all of us.

Key PREP Advantages

  • Remain an owner: Your group can retain a minority ownership stake in your building even after the sale.
  • Recurring income opportunity: PREP participants enjoy opportunities to participate in regular cash flow from the property.
  • Obtain tax advantages: Properly structured, you may be able to defer recognition of capital gains on the share of the property you retain as an owner.
  • Participate in profits upon resale: We expect ultimately to resell your property (with your long-term lease rates locked in place). At that point, you’ll realize a share of the profits proportionate to your ownership stake. Because we carefully assemble properties we acquire into a large portfolio, and because large institutional investors typically pay a premium for portfolios of compelling medical real estate assets, you may be able to realize increased value beyond the worth of your individual property.
  • Align physician interests: PREP participants can include physicians who were not part of your building’s previous ownership structure — so retiring doctors have the option to cash out while younger doctors have the opportunity to buy in.

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