How to Achieve Healthcare Real Estate Ownership

Who hasn’t heard a real estate success story? Whether it be from selling a home at the right time or buying a rental property at a great price — investing in real estate always seems to pay off in the long term.

While it may be a lucrative financial investment, medical real estate typically requires a significant upfront investment of time and resources for gains to be realized.

At Ashton Gray, we’ve refined our business model to ease the time and capital burden of investing in commercial real estate, specifically for healthcare professionals hoping to open a new practice.

How do we do it? We sat down with CEO Denver Green and Vice President, Real Estate Operations Jenna Adkins to discuss how Ashton Gray is shaking up the traditional methods of practice ownership and helping doctors, veterinarians, and dentists plan for the long term.

The Benefits of Healthcare Real Estate Ownership & Development

Let’s start with the reasons why, as a healthcare professional, you should consider real estate ownership and development.

Historically, the value of real estate in the United States has continuously risen. According to bankrate.com, an independent, advertising-supported publisher and comparison service, the average annual return on investment for commercial real estate is 9.5%.

It’s why a large percentage of the wealthy continue to place their money in real estate. In fact, 40% of an average millionaire’s assets consist of real estate according to finmasters.com — a financial guidance website.

That’s just the intrinsic value of real estate ownership but as a doctor, dentist, or veterinarian who owns and operates a medical office building, you can leverage value into additional income.

We’ve worked with many practice owners who anchor a commercial space with their practice and then are able to rent out extra space to other businesses. This provides another income stream — putting less stress on the practice, giving room for the practice to grow, and creating additional traffic around the practice that can transform into walk-ins and referrals.

At Ashton Gray, we love working with healthcare professionals because they provide valuable services to the community, and practice owners are able to match our entrepreneurial spirit. Plus, we have the tools, teams, and experience to help them overcome common real estate ownership and development challenges.

Healthcare Real Estate Ownership & Development Challenges

“Real estate development is complex, time-consuming and the learning curve can be steep for someone stepping into it for the first time,” explains Jenna.

There are many different disciplines involved in real estate that one can potentially study.

“You need to know how to handle financing, site selection, entitlements, budgeting, permitting, construction, and long-term asset management,” details Denver. “Not to mention, ensuring you are fundamentally making a solid real estate investment.”

The required combination of knowledge, time, and capital can be a burden for those with a full calendar. For doctors, who on average work 40 to 60 hours a week and the busiest 25% work a staggering 61 to 80 a week, it can be a seemingly impossible obstacle to hurdle.

“A doctor who is focused on growing their practice and is still practicing is going to find it challenging to give real estate development and ownership the time it needs to really push a project forward and get it finished,” advises Jenna. “AG takes all of this on for the doctor. This creates increased capacity for the doctor so that they can focus on growing their practice while we work alongside them to grow their real estate portfolio.”

How Ashton Gray Addresses Real Estate Ownership & Development Challenges

Like many industries in the United States, there has been a recent trend of large corporations consolidating private businesses in healthcare.

According to the American Medical Association, between 2012 and 2022 the share of physicians who work in private practices dropped from 60.1% to 46.7%.

According to the same report, in the 1980s 76% of physicians were practice owners. Today, only 46% own their own practices.

At Ashton Gray, we believe that the American dream of entrepreneurship is what has helped so many professionals and families provide for their families and communities.

To help spread that same entrepreneurial spirit that Ashton Gray was founded upon, we’ve made it our mission to make real estate development and ownership in the healthcare industry more accessible.

“The idea for Ashton Gray came from watching professionals make a choice, the majority of the time, to execute a 10-year lease on space they don’t own and then borrow money for a build-out,” recalls Denver.

“We observed this for quite some time and came to the conclusion that the major hurdles that kept healthcare professionals from choosing to own their own real estate were things that we would be able to solve easily.”

Ashton Gray is a true full-service real estate development and investment firm, we provide everything from site selection to turn-key construction to expansions.

“For us, accessibility means every healthcare professional knows and believes that real estate ownership is an option,” explains Jenna Adkins. “And it’s available to them whether they’ve been in practice for one month or twenty years.”

“There is a path to achieve ownership, regardless of circumstance or background. We’ve worked with healthcare professionals of all types, at all stages of their growth and career.”

Beyond employing and leveraging our network of developers, financiers, architects, construction teams, and more to support practice owners, Ashton Gray also requires no capital up-front to participate in ownership, whereas other developers will require capital. This allows Ashton Gray to form a partnership with practice owners, making each party more successful in the long term.

“Our primary strategy is centered around allowing the healthcare professional to keep their capital and not invest it into real estate,” explains Denver. “In our model, they own 50% of the asset, in most cases, without putting any cash down. We believe strongly that they need to keep their capital and use it to grow or stabilize their practice. This makes them a stronger tenant, which in turn lowers the risk of the real estate investment.”

Ashton Gray is able to assume the risk for practice owners due to their relationships with investors and their proven track record of success.

“I think the partnerships we leverage the most are related to our lending relationships,” says Denver. “We are able to get deals done because of our long-term lending partnerships in a tough lending environment that I don’t think most developers are able to get done.”

Ready to Think BIG?

With expertise centered around healthcare, a full team to focus on development, and investors to make it all a reality — opening your own practice and living your own medical real estate success story is becoming more accessible for healthcare professionals. If you think the Ashton Gray model may be right for you, schedule a consultation with us today.