Multi-Tenant Leasing Strategy Unlocks Value for Medical Asset in Pensacola, FL

After completing a two-tenant sale-leaseback of a medical office property known as Coastal Wellness, the SIG team, led by Cole Koepsell, was engaged by the buyer to lease the remaining vacancy and fully stabilize the asset. At the time, the property was operating at approximately 70% of its potential gross income, limiting both valuation and long-term performance.

Rather than relying on generic leasing efforts, the team implemented a targeted strategy focused on tenant alignment. Leveraging SIG’s medical real estate network, they identified and secured a complementary healthcare provider whose services enhanced the existing tenant mix and created a referral ecosystem within the building.

By prioritizing long-term fit over speed, SIG provided the buyer with a clear path to increase occupancy, strengthen the rent roll, and improve asset value, ultimately stabilizing the property and significantly growing its income potential.

Client Overview

SIG originally facilitated a two-tenant sale-leaseback of Coastal Wellness, a medical office property. The buyer then engaged SIG post-acquisition to lease the remaining vacancy, with the objective of growing NOI and achieving full stabilization.

The Challenge: Partial Occupancy Limiting Buyer Value

The property faced several obstacles:

• Operating at approximately 70% of potential gross income due to vacancy, which constrained NOI and suppressed valuation at the time of sale.
• The property buyer required a clear, executable path to full occupancy and income growth post-acquisition.
• Medical leasing requires precise tenant fit; the wrong operator would disrupt the building’s existing ecosystem.
• Achieving market rent in the specific suite proved difficult, requiring a strategic tradeoff between short-term rent and long-term stability.

The Strategy/Our Approach:

1. Leveraging the Medical Real Estate Network

SIG leveraged its medical real estate network to identify local and regional healthcare operators actively expanding in the market. Rather than broad, generic outreach, the team focused on tenants whose services would complement existing providers in the building, using the SIG network for targeted outreach.

2. Strategic Tenant Alignment

The team focused on strategic tenant alignment. The right  tenant for the property would:

• Complement existing medical providers
• Enhance patient referral flow between practices
• Increase overall utilization of the building

This approach transformed the property into a cohesive healthcare ecosystem rather than a collection of unrelated tenants.

3. Prioritizing Stability Over Short-Term Rent Maximization

To secure the right long-term tenant, the team made a strategic decision to anchor rent slightly below market rates. By prioritizing tenant credit quality, lease duration, and ecosystem fit, the team created significantly more long-term value for the asset than a higher-rent, lower-quality tenant would have produced.

Tenant Fit: What Made the Tenants a Strong Match?

The success of the leasing strategy was driven by alignment between tenant operations and the building’s existing provider mix:

• • Two Established Medical Providers: Anchored patient demand and referral flow, establishing a healthcare hub that enabled immediate integration for incoming tenants.
  • Complementary Healthcare Practice: A specialty provider whose services fed mutual referrals to and from the existing tenants, completing a three-practice ecosystem that increased cross-utilization and overall building productivity.

The Results: Full Stabilization and NOI Growth

The leasing strategy successfully transformed a partially stabilized asset into a fully occupied, income-producing property.

RESULTS SNAPSHOT*

• Property brought to 100% occupancy
• Secured a tenant with a 6-year lease 
• Increased gross income by approximately 30%
• Transformed the asset into a fully stabilized investment
• Significantly enhanced valuation and exit potential

Leasing Insights: What This Deal Reinforced

This transaction reinforced several important principles:

• Leasing is a value-creation strategy: Leasing can materially increase NOI and asset value.
• Fit matters more than speed: It took ~8 months to secure the right tenant, highlighting the importance of patience.
• Strategic concessions can drive long-term value: Accepting slightly below-market rent can improve tenant quality and stability.
• Ecosystem thinking enhances performance: Complementary tenants increase productivity, retention, and overall asset strength.

Why Work with SIG for Leasing?

SIG brings a different perspective that blends investment sales, sale-leaseback expertise, and hands-on leasing execution. Because our team understands how buyers underwrite leases, we structure transactions with valuation in mind, helping owners maximize both income stability and asset value.

Partner with SIG for leasing because we offer:

• A deep medical real estate network for targeted tenant sourcing
• Proactive outreach strategies that go beyond passive marketing
• Leasing execution aligned with investment sales objectives
• Expertise in how lease structure impacts buyer underwriting, cap rates, and overall valuation

What Medical Property Owners Should Know Before Leasing

Finding the right tenants is not immediate; it can take months to execute properly. Identifying the right medical tenant often requires patience, and owners should be prepared for upfront costs, including tenant improvements and potential downtime during vacancy.

Before moving forward, it’s critical to evaluate a prospective tenant’s business model and long-term viability. A practice with strong referral relationships and a growing patient base presents a fundamentally different risk profile than one without. Just as important is understanding how the tenant will operate within the space and interact with neighboring providers.

When approached strategically, leasing can significantly increase NOI and overall asset value. Identifying the right tenant profile upfront not only strengthens long-term performance but also reduces future vacancy risk and enables more proactive asset management.

Looking to Lease Your Space? Connect with our team to find the right tenant.

IMPORTANT INFORMATION: Sands Investment Group and its affiliates do not practice law, and do not give legal, tax, or accounting advice. All clients are advised to consult their tax, legal, and accounting advisors before engaging in any transaction.