What We Buy
What We Buy
Montecito buys more medical real estate than anyone in the country. In a typical year Montecito reviews more than $20 billion of individual medical outpatient real estate and acquires fewer than 3%. Here is what we look for, so the first conversation can be about your growth rather than our criteria.
Acquisition Criteria at-a-Glance
| Criterion | What qualifies |
|---|---|
| Building size | 15,000+ rentable square feet |
| Tenant group | 5+ physicians in the practice |
| Lease term | 8+ years of weighted average lease term on the as-is rent roll; 10–15 years preferred |
| Deal size | $8M+; $20–50M is the sweet spot |
| Asset class | Class A and B, stabilized, with strong tenant credit |
| Medical use | 90%+ medical; more than 10% non-medical or vacant is a pass |
| Ownership | Fee simple, or a ground lease of 75+ years including extensions; delivered free and clear |
| Geography | Nationwide, on or off campus, all U.S. markets |
Portfolios of qualifying buildings and health-system monetizations are welcome. Multi-tenant buildings also work with a strong health-system or physician-group anchor.
The Structures We Lead With
Single-Tenant Net Lease
We prefer single-tenant buildings which represents about 85% of our transactions. We also buy multi-tenant that has a strong tenant anchor presence.
Provider Real Estate Partnership (PREP)
Allows the seller to stay in the deal after they sell it to enjoy monthly distributions, tax-deferral on capital gains, and earn additional profits on a later sale.
Development
Build-to-suit development services. Montecito can acquire the asset at certificate of occupancy.
Physician/Health-System Asset Monetization
Selective monetization of medical real estate that improves liquidity and credit positioning while preserving clinical control.
Affiliation
On or off campus, tied to large physician groups, leading hospitals, and health systems.
From Submission to Closing
Step 01
Submit the Property
Address, size, tenant, and lease basics. Brokers and owners both use the same form.
Step 02
Investment Team Review
Each submission is screened against our criteria and routed to: existing buildings to Investments, new projects to Development.
Step 03
Fair Market Pricing and a Letter of Intent
Price and lease terms together, with co-investment and tenant improvement options on the table.
Step 04
Due Diligence and Closing
Often within 60 days of a signed PSA, depending on due diligence and preference of seller.
Related
For Brokers
Why brokers bring Montecito their off-market deals.
Portfolio
The buildings we have bought.
Know a Great Medical Outpatient Property?
Tell us about it. A member of our investment team reviews every submission.
Our Trusted Partners
Long-term relationships with leading physician groups across 40 states.
