Radiology practice sells its offices in $29M leaseback deal, netting 77% profit
A Buffalo, New York-area radiology practice recently sold its offices for $28.75 million, netting a 77% profit in the leaseback deal.
Windsong Radiology unloaded its two connected buildings to a Nashville, Tennessee, real estate investment trust after previously acquiring them for $16.25 million in 2014. Operations for the imaging group will remain unchanged, with buyer leasing the offices back to providers, Buffalo Business First reported Jan. 11.
“It is quite common to see REITs go after medical properties,” David Mingoia, Amherst Industrial Development Agency executive director and CEO, told the publication. “Medical properties like Windsong are good, stable tenants.”
MMAC HT II Amherst Spindrift NY LLC was the buyer in the transaction, according to the county clerk’s office, while Spindrift Medical Park LLC was the seller. Thomas Summers, MD, is listed in documents as president of the latter, a title he also holds with the imaging group, which was first established in 1987. Windsong built the initial 54,109 square-foot property in 1992 and the companion 28,823 square-foot building in 1995, the report noted.
Private equity-backed U.S. Radiology Specialists added Windsong Radiology and the group’s five outpatient centers to its network in late 2020. And the partners subsequently acquired Buffalo MRI, a 30-year-old imaging center in Amherst, New York, in August.
Founded by Charlotte Radiology and investment firm Welsh, Carson, Anderson & Stowe, USRS has grown rapidly to include some 160 centers across 14 states. CEO John Perkins said in September that USRS plans to continue growing through M&A, hoping to hit $2.7 billion in revenue in the next five years.
U.S. Radiology Specialists recently opted to raise $450 million in new term loans, coupled with $118 million more in “rollover equity,” to finance the acquisition of two more unnamed practices. Officials expect the additions will contribute $48 million in additional earnings, Moody’s revealed in a recent update. Including the two new practices, the company generated $622 million in revenues last year and $1.1 billion when also counting joint ventures.
A USRS spokesman confirmed the two new acquisitions and said they have not yet been announced, declining to comment further.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.