In today’s high-interest-rate investment climate, autism therapy clinic growth is facing unique financial challenges. The demand for autism therapy and related services remains strong, but securing traditional funding has become more difficult. With investors increasingly hesitant to commit capital in an environment of rising interest rates, companies are searching for alternative ways to finance their expansion. In this environment, real estate may offer a key solution for autism therapy clinics looking to accelerate their growth—blending the world of commercial real estate with the ever-growing demand for autism services.
The Financial Landscape for Autism Therapy Providers
Many organizations across industries are experiencing the effects of a volatile financial market. In particular, interest rates have risen significantly, making it more expensive for companies to access capital through traditional means. With investors cautious about making new commitments, autism therapy providers may find it more difficult to secure funding for growth initiatives such as expanding their clinic networks, upgrading facilities, or even improving service offerings.
However, the demand for autism therapy services has not waned. In fact, the need for these services continues to grow as awareness of autism spectrum disorders (ASD) increases, and more families seek professional help. This creates a dilemma for autism therapy organizations: How do you fund growth in an environment where traditional investment capital is hard to come by?
The answer for many companies could lie in a more creative strategy: turning real estate into a growth accelerator. By using real estate initiatives, such as sale-leaseback agreements and property ownership, companies can tap into a valuable asset to fund their growth without having to rely on traditional investment avenues.
How Real Estate Can Be a Growth Accelerator
Real estate strategies like sale-leasebacks and purchasing property provide autism therapy organizations with a way to unlock capital, control operating costs, and even build long-term equity. Sale-leasebacks are a particularly attractive option for businesses seeking to maintain access to their current facilities while also generating immediate capital. In a sale-leaseback arrangement, a company sells its real estate to an investor and then leases the property back from the buyer. This allows the company to continue operating in the same space while simultaneously securing a cash influx from the sale.
The primary benefit of a sale-leaseback agreement is that it allows the organization to raise capital without giving up equity in the business. The money generated from the sale can be used to fund business growth, reduce debt, or reinvest into other strategic initiatives—such as expanding service offerings, increasing the number of clinic locations, or upgrading technology.
Additionally, in some cases, owning real estate can actually be more advantageous than leasing space. When a company owns its own property, it can secure long-term stability with fixed mortgage payments, rather than being subject to unpredictable lease escalations or rising rental rates. Furthermore, as the company pays down its mortgage over time, it builds equity in the property, which ultimately becomes an asset on the company’s balance sheet. This can be a valuable tool for long-term financial planning and can help the organization weather financial challenges in the future.
A dramatic example of how real estate ownership can diversify revenue sources comes from Children’s Autism Center. In May 2023, the organization partnered with a nonprofit to acquire a strip mall in Fort Wayne, Indiana. The acquisition not only provided the center with additional space for its services but also created opportunities for diversifying revenue streams. The strip mall’s extra space allowed the center to introduce additional services that could be offered alongside autism therapy, contributing to the organization’s overall growth. This example demonstrates how a strategic real estate acquisition can provide both operational benefits and opportunities for increased revenue generation.
For companies like Commonwealth Autism Care, real estate and debt are often held by a separate holding company. This structure allows the autism therapy company to continue operations while paying rent to the holding entity. Blevins noted that smaller operators, or those who may eventually sell their practices, can derive benefits from this arrangement. By holding on to the real estate while selling the practice, entrepreneurs retain ownership of valuable assets, which can be monetized in the future. As Blevins explains, “Real estate is tied into a deal, it muddies the valuation of the business itself,” highlighting how separating real estate ownership from business operations can allow for a cleaner transaction when it comes time to sell.
The Benefits of Real Estate Ownership Beyond Just Financial Flexibility
While the most obvious benefit of owning real estate is the ability to secure a more stable financial footing, there are additional advantages to consider. For instance, owning real estate allows companies to build equity over time, which can serve as a valuable asset in the future. As the mortgage is paid down, the company’s ownership stake in the property increases, providing a solid financial foundation for future expansion or investment opportunities.
Moreover, owning real estate can offer greater control over the space. Companies that lease their buildings are often subject to lease terms, which may not be flexible enough to accommodate changes in the business’s needs. By owning property, companies have the autonomy to make modifications and improvements to the space, such as expanding or redesigning the layout, upgrading facilities, or installing equipment. This ability to customize the space to meet the needs of the business can be a significant advantage, particularly in the fast-evolving field of autism therapy, where the needs of clients and staff may change over time.
An autism therapy clinic growth strategy that incorporates real estate ownership could provide greater flexibility in addressing the needs of both clients and staff. As the industry grows, being able to quickly adapt your space to accommodate more clients or new types of therapy will give your clinic a competitive edge.
Sale-Leasebacks as a Strategic Tool for Expansion
The sale-leaseback strategy is gaining traction among autism therapy providers looking for innovative ways to raise capital without taking on additional debt. By selling their real estate and leasing it back, providers can unlock significant amounts of cash, which can be used to fund expansion efforts, upgrade equipment, or pay down existing debt. This strategy also allows companies to continue operating in the same facilities while benefiting from the immediate capital infusion.
Bryan Huber, director of the sale-leaseback group at SAB Capital LLC, explained that his company has helped autism therapy providers raise millions through sale-leaseback deals. For example, SAB Capital facilitated the sale of a vacant property in Atlanta, which was then converted into an autism therapy clinic. The property was acquired for $1 million, and after making the necessary improvements, it was sold for $3.5 million. The proceeds from the sale provided the provider with a non-dilutive funding source, enabling them to expand their operations without incurring additional debt.
Other clients have used sale-leasebacks to convert vacant buildings—such as former funeral homes or bank branches—into autism therapy centers. These types of properties are often available at a fraction of the cost of traditional commercial real estate, and the sale proceeds can be reinvested into the business. In one instance, SAB Capital helped an autism therapy provider raise $6.1 million through the sale-leaseback of five clinics in Michigan and Indiana. The capital was then used to pay down debt and fund expansion into Nebraska. This shows how a focused approach to real estate can provide a significant advantage in scaling autism therapy clinic growth.
Franchising: An Alternative Expansion Strategy
While owning and leveraging real estate is one way to accelerate growth, franchising has become another viable option for autism therapy providers looking to expand their reach without taking on all the operational responsibilities. By franchising their brand, providers can expand their footprint more rapidly while generating income from franchisees who are responsible for managing individual locations. This model allows providers to maintain control over the brand and service standards while minimizing the financial burden associated with owning and operating multiple locations.
Franchising also allows providers to tap into the entrepreneurial spirit of other operators who are eager to expand the availability of autism therapy services in their local communities. This model provides a steady stream of revenue from franchise fees and royalties, while also enabling providers to maintain a strong, unified brand across all locations.
Conclusion: The Future of Autism Therapy and Real Estate
As the demand for autism therapy services continues to grow, providers must seek innovative solutions to finance their expansion efforts. Real estate strategies, including sale-leasebacks and property ownership, offer a powerful tool for unlocking capital, controlling costs, and building long-term equity. By creatively leveraging real estate, autism therapy providers can ensure their ability to meet the rising demand for services while also securing a stable financial foundation for future growth.
By incorporating real estate into autism therapy clinic growth strategies, providers can secure long-term stability, create additional revenue streams, and ultimately expand their reach. Whether through ownership, creative real estate transactions, or franchising, those who think outside the box will be better positioned to lead the way in providing critical services to families in need.
