In Northern Ohio and Florida, 24 Cleveland Clinic properties were sold to MedCraft HealthCare Real Estate. The Clinic is then leasing back the spaces to continue their operations and services at those sites (Newmark). CLICK IMAGES TO ENLARGE THEM.
All sites are in Northern Ohio, Florida
ARTICLE UPDATED SEPT. 10, 2025
A large-scale sale-leaseback of 24 facilities in Ohio and Florida is underway, and it’s Greater Cleveland’s largest employer that’s initiating it. The sale-leaseback was sought by Cleveland Clinic, and the buyer is MedCraft HealthCare Real Estate. a suburban Minneapolis-based health care real estate company.
The sale-leaseback won’t directly affect health care operations and services of the tax-exempt Cleveland Clinic Foundation, say Clinic officials. But putting valuable buildings and their lands, some of them large, into the hands of a for-profit, taxable company could have major benefits for multiple communities and their school districts.
A list of the known properties, identified by their location-specific corporate names, is posted at the bottom of this article. There are 20 Northern Ohio properties and four in Florida. It appears that none of the Clinic’s Main Campus facilities are included.
Each property was acquired by a separate corporate affiliate using location-oriented names such as “FG MC II Cleveland LLC.” However, that is the only name that does not refer to a specific facility. The other 24 are more specific, such as “FG MC II 850 Westlake LLC” which refers to the 95,000-square-foot Westlake Medical Campus Building A, 850 Clemens Rd.
Not all occupants of these sale-leaseback properties are Cleveland Clinic operations. Some are Clinic-affiliated yet independent tenants like Partners Physician Group, Akron General Medical Center and others. It remains to be seen what impact this change could have on their rents and occupancies.
Cleveland Clinic CEO Tomislav Mihaljevic in 2022 announced a $1.3 billion expansion of facilities in Cleveland and other cities for the health care giant. But that program, while on time, has reportedly gone over budget. Actual final costs for each project or in total are not available (Cleveland Clinic).
On Sept. 4, a total of 24 Cleveland Clinic properties began transferring ownership to MedCraft HealthCare Real Estate as part of the sale-leaseback transaction. NEOtrans first learned of the potential sale-leaseback of two dozen properties in March and asked Cleveland Clinic’s Senior Director Corporate Communications Angela Smith about the rumor.
Smith confirmed that it was under consideration but said in March that it was a long way from happening. Then, as now, she emphasized that it would not affect Clinic operations or services.
“Cleveland Clinic has signed a long-term lease that ensures operations and access to care will continue at each facility,” Smith said. “Additional details and a list of sites will not be disclosed (by Cleveland Clinic). These facilities represent a small percentage of our overall real estate footprint. We remain committed to the communities we serve and will continue to provide access to care in each of these locations.”
No additional properties will be sold/leased back at this time, she said. NEOtrans also asked for clarification on the reason for the sale-leaseback. The rumor in March was that the Clinic realized a lower-than-expected operating margin last year and have lower financial expectations going forward.
At this time last year, the $1.1 billion Neurological Institute on Carnegie Avenue in Cleveland was rising fast. But so were construction costs for this and other new Cleveland Clinic buildings (NEOtrans).
“Cleveland Clinic remains financially stable,” Smith added. “As demand for our healthcare services continues to grow, we are carefully managing expenses to ensure long-term sustainability.”
“As part of our efforts to reduce expenses and manage costs effectively, we have transitioned several of our outpatient facilities from an ownership model to a long-term leasing model,” she said. “This will reduce maintenance costs and generate additional capital to support facility updates and other health system projects to improve patient care.”
The Clinic has been undertaking a massive expansion of its facilities which, in 2022, was projected to cost $1.3 billion. But construction costs in recent years have escalated faster than inflation. A media report noted that just one new building, the 1-million-square-foot Neurological Institute on Carnegie Avenue in Cleveland, is projected to cost $1.1 billion.
Additionally, the Clinic is planning a $150 million expansion of Fairview Hospital in Cleveland’s West Park neighborhood plus a $340 million expansion of Avon Hospital that will nearly double its size.
In Downtown Cleveland, Bedrock Real Estate, Cleveland Clinic and the Cleveland Cavaliers are partnering on the 210,000-square-foot Global Peak Performance Center, now under construction next to the Cuyahoga River (NEOtrans).
Revealing the Clinic’s sale-leaseback was Newmark Real Estate Vice Chairman Terry Coyne at the commercial real estate company’s Cleveland office. After posting the news on LinkedIn, he told NEOtrans in a phone interview that his marketing and research team discovered the deal amid public records of other property transactions.
Terms of the deal were not disclosed by the Cleveland Clinic, MedCraft or in public records. However, Coyne noted that a mortgage was filed on Sept. 4, and records 25 MedCraft affiliates securing a total of $350,769,360 in consideration from Capital One, National Association.
“A sale-leaseback is a financial transaction in which a property owner sells an asset to a buyer and simultaneously leases it back,” Coyne said. “The seller remains in possession and continues operating the property, while unlocking capital tied up in the real estate. The buyer becomes the new owner and earns a steady income stream through lease payments.”
MedCraft HealthCare Real Estate describes itself as a national leader in the development, financing and management of ambulatory care and medical office buildings. MedCraft focuses solely on healthcare real estate projects and has partnered with healthcare systems and physicians in more than 86 projects totaling over $3.5 billion throughout its four-decade history.
Cleveland Clinic is Greater Cleveland’s largest employer, with nearly half of its 82,000 employees based out of buildings at its Main Campus near University Circle (Cleveland Clinic).
Here are the 24 properties and/or facilities or the cities in which they are located:
Hobe Sound, FL
Port St. Lucie, FL
Stuart, FL
Vero Beach, FL
Akron, OH (Akron General, 1 Akron General Ave.)
Broadview Heights, OH
Canton, OH (Mercy Hospital, 1320 Mercy Dr. NW)
Chagrin Falls, OH
Fairlawn, OH
Garfield Heights, OH
Lakewood, OH
Lorain, OH
Mansfield, OH
Massillon, OH
North Olmsted, OH
Sandusky, OH
Sheffield, OH
Solon, OH
Twinsburg, OH
Westlake, OH (Medical Campus Building A, 850 Columbia Rd.)
Westlake, OH (North Ohio Gastroenterology, 30701 Clemens Rd.)
Willoughby Hills, OH (Family Health Ctr.-South, 2570 SOM Ctr. Rd.)
Willoughby Hills, OH (Family Health Ctr.-North, 2550 SOM Ctr. Rd.)
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