With the advent of cloud computing, the concept of “Software as-a-Service, or SaaS, joined the business lexicon. Since then, a variety of industries, from manufacturing to infrastructure, have embraced this business model and spawned an entire alphabet of “as a Service” options. 

Here at MM2 we are pioneering a new concept in healthcare delivery:

 RaaS – Real Estate as a Service

What does “as a Service” mean?

“As a Service” describes an emerging business model that shifts the customer/supplier relationship from the traditional model of ownership to a model that evolves around providing a service on a non-ownership basis. In the healthcare industry, where the tradition has been for the provider to own their facility, RaaS means relinquishing ownership of your real estate assets and moving away from daily facilities management responsibility to focus on full-time healthcare delivery.  At a time when 75% of healthcare companies say they would consider leasing, rather than buying, their commercial real estate*, it’s important to understand the short and long-term benefits of partnering with a real estate investor who specializes in healthcare and how “RaaS” might be the solution to your facility needs.

Transition Capital Expenses to Operational Expenses

Capital expenses are, well … expensive. Buying a building requires a significant cash outlay that can take decades to recoup, and that’s before taking into consideration the ongoing costs to equip and maintain your investment.  Instead of tying up capital, many healthcare systems and providers are opting to lease, lease to own, or sell and lease back, their facilities and devote those resources to growing other aspects of their practice that deliver a faster ROI.  Converting facility expenses to monthly operational expenses creates predictable monthly spending and a more secure financial operation.

Focus on core business and core competence

A key tenant of the “as a Service” business model is to concentrate resources on your core business, not tangential offshoots. Healthcare providers are in the business of caring for their patients and, even with the most competent and supportive staff, the demands of running a healthcare practice can be overwhelming.  By offloading responsibility for facility acquisition, maintenance, and management to an outside party, providers are free to do what they do best, deliver excellent patient care. 

Risk mitigation

Things happen. Even in the best of times, roofs leak, equipment breaks, and unforeseen expenses can spring up when you’re least prepared; resulting not only in costly repairs, but a potential loss of income.  Insurance can help, but in today’s uncertain economy, it’s more important than ever to minimize exposure to damages or loss when it comes to one of your most expensive assets: your facility. That’s another reason why so many healthcare systems are turning to leasing as a way to reduce their overall exposure to risk and transfer it to a third-party investor.

MM2 is a dedicated team of investment professionals who combine their expertise in healthcare delivery and commercial real estate to partner with providers on real estate solutions that meet their specific needs, including sales, leasing, or financing for improvements and new builds. At MM2, we believe that your real estate should work for you, not the other way around. Contact us at mm2.com to speak with a healthcare real estate professional today.

July 12, 2022, *GlobeSt.com,