Healthcare REITs: Navigating Regulatory Challenges and Minimizing Liability Risk

Understanding Organizational, Operational and Tax Considerations When Dealing With REITs

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, September 10, 2015

Recorded event now available

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Program Materials

This CLE webinar will provide healthcare counsel with a review of the organizational requirements and structures for real estate investment trusts (REITs) and the limitations and challenges of REITs in the healthcare industry. The panel will discuss regulatory, corporate, business and tax issues involved with healthcare REITs and offer best practices to minimize liability risks.

Description

Healthcare real estate investment trusts (REITs) own and operate hospitals, senior housing facilities, skilled nursing facilities, and medical office buildings. The REITs invested heavily in this sector in 2014, and that trend has continued into 2015.

A very few examples of the staggering dollars involved and huge number of healthcare acquisitions by REITs include in Jan. 2015 alone: Griffin-American Healthcare REIT III’s acquisition of $340 million+ in healthcare property. Health Care REIT acquired assisted living facilities in New England for $360 million, and Intercontinental purchased the portfolio in 2005 for about $152 million. And, the acquisitions continue rolling out to now. Brookdale Senior Living and REIT HCP Inc. acquired private-pay Chartwell Retirement Residences and healthcare services for $849 million in on June 30, 2015.

The REIT Industry Diversification and Empowerment Act (RIDEA) changed the landscape by permitting healthcare REITs to lease facilities to a taxable REIT subsidiary, which then captures the operational income from these facilities on an after-tax basis. REITs have seen strong growth, but they have absorbed additional risk with RIDEA-structured acquisitions, including exposure to personal injury claims. The long-term care industry has seen a significant jump in litigation, including an increase against facilities operators.

Counsel must understand the regulatory and operational requirements as well as the benefits and risks of healthcare REITs.

Listen as our authoritative panel of healthcare attorneys examines the regulatory issues associated with the corporate, business and tax issues involved with healthcare REITs and offer best practices to address regulatory issues.

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Outline

  1. Role of REITs in healthcare
  2. Operations requirements
  3. Alternate acquisition structures for healthcare REITs
  4. Tax issues with RIDEA-structured acquisitions
  5. Determining which legal entities should hold licenses, provider agreements, and certificates of need
  6. Obtaining regulatory authorizations for the REIT transaction
  7. Overcoming regulatory challenges and minimizing liability risks

Benefits

The panel will review these and other key issues:

  • What role do REITs play in the healthcare industry and how has RIDEA affected the heathcare REIT sector?
  • Under RIDEA, what risks do healthcare REITs now face? What steps can be taken to mitigate those risks?
  • What are the key organizational, operating and tax REIT rules that may impact the structure or terms of a transaction with a REIT entity?
  • What are the limitations and challenges of REITS for healthcare businesses?
  • What are best practices for healthcare businesses contemplating or engaging in transactions with REITs?

Faculty

Steven A. Kaye
Steven A. Kaye
Partner
Arnall Golden Gregory

Mr. Kaye focuses his practice on real estate activities, such as the acquisition, sale, leasing and financing of...  |  Read More

Rubinger, Hedy
Hedy Rubinger
Partner
Arnall Golden Gregory

Ms. Rubinger focuses her practice on the representation of healthcare. She counsels clients on issues related to...  |  Read More

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