Sale-leasebacks play new role in health-care operations, JLL says.

Position:Commercial - Report

Non-profit health-care providers face leveraging real estate property values as a competitive source of capital, said health-care and real estate finance experts at Jones Lang LaSalle (JLL), Chicago.

Falling revenue and severe capital restrictions place greater pressures on health-care facility operations across the sector, but non-profit health-care providers will need to follow for-profit health-care system guidance in accessing capital, according to JLL's Healthcare Real Estate Financing Outlook.

JLL forecasts sale-leaseback adoption by non-profit hospitals by leveraging medical office buildings and core real estate holdings, including acute and sub-acute hospitals, as capital sources. After 20 percent to 30 percent declines in charitable donations, sale-leasebacks will gain traction in the non-profit sector, the report said. JLL said it expects health-care systems to purchase equipment by executing sale-leasebacks, if possible, that amortize rental fees on the life of the lease.

Some hospitals, for example, purchase equipment by folding costs into the life of a lease and reduce equipment costs by using an...

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