Case Study

Eye Institute’s Cash-Out Refinance Creates Sustainable Partner Buyouts

Case Study Details


Financing Type:
Buyouts
State:
Virginia

Virginia Eye Institute’s twenty-three physician partners had amassed almost $400,000 in equity each. The group was not only experiencing issues with buy-ins but also, more importantly, with providing sustainable levels of cash flows to support the significant buyouts for retiring physicians. That’s when CMAC got involved. We first worked to understand the objectives of the physician partners at VEI and subsequently created a financing structure that would improve partner integration moving forward.

 

CMAC suggested that the group complete a cash-out refinance which led to the halving of each physician’s equity. The real estate entity’s cash flow was relatively unchanged, allowing the retiring partners to be bought out, the existing buyout obligations to be paid out, and for future partner buyouts to be sustainable while maintaining desirable returns.

 

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Case Studies