Space Sharing Timeshare Arrangements

healthcare value
with clarity.

  • Independent Physician (Landlord) provides services to Hospital or Hospital Employed Physician (Tenant)
  • Hospital (Landlord) provides services to Independent Physician (Tenant)
  • Independent Physician (Landlord) provides services to another Independent Physician (Tenant)
  • Non-Healthcare related Office Building Owner (Landlord) provides services to an independent Physician and/or Hospital employed Physician (Tenant)

Existing physician office space distribution capitalizes on the fact that many physician practices have underutilized time and space that can be offered to other physicians on a time-slot basis. The landlord/tenant relationship can be an independent physician providing space and services to a hospital employed physician, or vice-versa. This arrangement typically consists of the tenant given exclusive access to certain identified rooms (exam rooms, physician office, etc.), while sharing certain common areas with the landlord providers also utilizing the space. The medical practice will provide all the furniture and equipment for each room and typically make available many of the resources that already exist in the practice. It is also very common for the tenant to share the medical practice’s front desk receptionist on a limited use basis.

Space Sharing timeshares are not one size fits all; therefore each arrangement needs to be analyzed for assuring proper allocation of the shared space and services to ensure it fits with the regulatory guidelines and not providing the referral source physician any undue benefit.  This is where working with an experienced healthcare appraisal firm is important as we can walk both parties through important discussions.

Medical office timeshare agreements have become more popular between hospitals and physicians. To ensure the arrangement is Stark compliant, each component must be considered, including accurate space utilization and rental rate (exclusive-use and shared), furniture and equipment, services and the appropriate short-term premium given the specific facts and circumstances of each arrangement. With well-documented support to ensure the timeshare rate is FMV, a medical office timeshare can be a great option to reach a larger patient base or providing added convenience and improved access to care to an active patient base, while minimizing overhead costs.


Additional resources on space sharing agreements:


Health Care Real Estate Leasing and Space Sharing Arrangements – HMS Valuation Partners (hmsvalue.com)


Mike Vetter

Partner—CVA, ASA

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