ASC & Clinic Sublease; Wrap-Around Lease; 12 Year Term at 40%

OVERVIEW

  • 251 National Harbor Boulevard | Oxon Hills, MD
  • 8,000 SF
  • Tenant Representation
  • Sublease with Wrap Around Lease

For more information regarding this case study, please contact:

MICHELE KORNBLUTH

D (443) 812-5144
Email // Resume

 

BEN BROOKS

D (443) 741-4053
Email // Resume

 

CHRIS JACOBSON

D (952) 800-2374
Email // Resume

 

 

The Client

Clearway Pain Solutions is a private equity backed provider of multidisciplinary interventional pain management. They operate across nine states including Alabama, Delaware, Florida, Maryland, New Jersey, and Pennsylvania. Clearway aims to be recognized as the leading integrative pain management organization in the U.S.

“I am writing in strong support of the medical office brokerage services provided by Lee & Associates. The team has worked with us in several markets including Maryland, Virginia, Delaware, Florida, Alabama, Georgia, New Jersey, South Carolina and Pennsylvania. They were adept at finding the best available properties and negotiating preferable terms. The team used intelligence, experience and market wisdom to position us best for success in all these markets.

Our center builds are often complex given the business orientation toward Ambulatory Surgery Centers and we benefited from Lee's sophistication. We highly factored the team's input in site selection and business decisions. We truly feel as though they have our best interest in mind and are partners in making decisions.

Beyond being competent and capable, the communication was very good. We could count on timely responses and prompt follow up to urgent matters. The team was ethical, and Clearway's interests were not secondary.

My recommendation for the medical office brokerage services provided by Lee & Associates is without reservation. I have worked with several medical office brokerage companies; the medical office team at Lee stands out in terms of performance and communication." 

- Ira Kornbluth, MD President, Clearway Pain Solutions

The Challenge

Clearway Pain sought to expand into a new market as part of their practice growth. We identified an excellent sublease opportunity previously developed as a clinical suite by the University of Maryland Medical System (UMMS), which met Clearway’s clinical requirements. In addition, there was an adjacent shell space available for sublease that could be developed into an Ambulatory Surgery Center (ASC), addressing Clearway’s need for such a facility. However, the sublease term had only six years remaining, which was insufficient for Clearway to invest in building an ASC.

In addition, The Medical Pavilion at National Harbor, had paid parking, which the Tenant saw as an issue for patients and staff since all of their other locations in the market had free parking.

Our Approach

To resolve this, we worked with the landlord's broker to structure a new market lease that would commence six years later, extending the total lease term to 12 years. This arrangement provided Clearway with the security they needed for long-term planning.

We worked with the sublandlord's broker to help offset parking expenses, which directly affect the bottom line. The parking garage was owned by a 3rd party so we couldn't negotiate directly. Therefore, we looked at all of the sublease terms as an opportunity to negotiate.

The Outcome

The sublandlord was relieved to get this off their books and offered us all of their clinic furniture and exam tables as a last concession. Either way, the upfront sublease rental rate, which was over 40% below market value, along with favorable concessions—including six months of rent-free occupancy and $550,000 in improvement allowances from the sublandlord—made the long-term commitment attractive and viable for Clearway to invest over $1,000,000.