Healthcare Real Estate
A significant component of Kutak Rock’s national healthcare practice involves real estate. With a focus on the representation of national, regional and local healthcare systems and hospitals in a broad range of real estate matters, including acquisitions, dispositions, development, financing, construction and third-party leasing and development of medical facilities, in all cases with an understanding of, and a focus upon, ensuring compliance with applicable healthcare laws and regulations, including the Anti-Kickback Statute, the Stark Law and Internal Revenue Code Section 501(c)(3) rules and regulations.
Lawyers in our real estate practice are well-versed in all aspects of documentation, negotiation and diligence with respect to real estate acquisition, disposition and leasing transactions, representing healthcare clients in transactions ranging from single property acquisitions, dispositions and ground leases to large-scale real estate portfolio transactions. Our real estate lawyers focusing on healthcare real estate transactions are actively involved in identifying, analyzing and structuring project-specific issues; preparing and negotiating transaction and development documents, easements, covenants and restrictions; reviewing and negotiating title insurance coverage and surveys; reviewing and analyzing environmental matters; and reviewing and analyzing all aspects of real estate diligence materials.
In addition, our real estate lawyers have experience and expertise representing both health system and hospital clients and national medical facility developer clients in the development and construction of new medical facilities, including both free-standing facilities and facilities located on hospital campuses. These transactions often occur within the context of a hospital’s master facility project plan, and many include leasing to and development by third-party medical facility developers. Our work in these areas has included assisting clients in structuring the transaction and negotiating, preparing and reviewing construction contracts, master development agreements, purchase and sale agreements, ground leases, operating and easement agreements, form tenant leases, financing documents and related transaction documents. In addition to the traditional real estate issues arising in both third-party real estate development transactions and physician/hospital joint venture real estate syndications, a number of factors must be considered in understanding and balancing the continuing interest of a hospital or healthcare system in the property being developed with the interest of equity partners and their lenders in operating the property at its highest and best use. These include matters such as regulatory compliance considerations related to valuation of the real estate asset, balancing tenant eligibility requirements and property use restrictions with financing considerations and understanding the potential short- and long-term effects of placing restrictions on the ability of an equity owner to transfer its interest in the property.
The firm’s real estate practice also includes a full-service construction practice group consisting of experienced practitioners on national, state and local levels in all aspects of the construction industry. Lawyers practicing within the group have experience in drafting, reviewing, negotiating and advising clients on development, design, construction management, construction and related contracts, including extensive experience with AIA forms. In addition, the firm regularly provides general advice in a variety of areas, including specification, mechanics’ liens, lien waivers, suspension of performance, contract drawing/contract document interpretation and issues, certification requirements generally associated with construction projects, job scheduling, warranties, insurance coverages and bonds. As part of a multidisciplinary practice which includes the related areas of commercial practice, litigation, government (public) contracts and suretyship, the firm’s construction lawyers also draw upon their specific experience preparing, defending and analyzing the full spectrum of construction claims (including changes, delay, impact and acceleration, labor and inefficiency, defective specifications, differing site conditions, suspension of work, termination for convenience, wrongful termination and termination settlement procedures and bond actions), as well as their experience handling such matters as bid protests, False Claims Act matters, Contract Disputes Act issues and federal grant and assistance programs.
The firm’s real estate lawyers concentrating their practice in healthcare real estate also have a broad range of experience representing health system and hospital clients in physician provider and other tenant leasing matters. These include the creation of system-wide lease and related real estate template agreements; negotiating leases, tenant estoppels, subordinations and related documents; assisting clients in the evaluation and analysis of market valuation studies; advising clients in connection with establishing fair market value rental rates and commercially reasonable lease terms; and assisting clients in establishing and implementing effective processes and procedures to ensure proper lease oversight and administration.