Lease Structuring Mistakes That Are Killing Healthcare Real Estate Deals

The rent may be right.

The location may be perfect.

The operator may be strong.

But if the lease isn’t structured properly, the deal falls apart.

In 2025, we’re seeing more healthcare real estate deals die in due diligence—and lease terms are a common culprit. From valuation gaps to lender pushback, poor lease structuring can wipe out months of work.

Here’s what’s causing problems right now:

→ Misaligned rent escalations. Annual bumps over 3% may look great on paper but scare off buyers who don’t believe they’re sustainable.

→ Short lease terms with no renewal clarity. A 5-year lease with no documented options to renew signals volatility—not stability.

→ Ambiguity in expense responsibility. If it’s unclear whether the tenant or landlord is handling repairs, compliance costs, or capex—expect questions.

→ Missing break language clarity. Especially in behavioral health and senior care, buyers want assurance that the operator is committed and can’t exit early without penalty.

→ No connection to licensing. If the tenant’s license is tied to the building, that adds value—but it needs to be reflected in the lease.

The solution? Structure leases with an investor’s eye. Make the document tell the story of security, performance, and long-term tenancy.

From a valuation standpoint, well-structured leases improve cap rate compression, make financing easier, and give appraisers a clearer picture of risk. Bad leases? They invite retrades and kill momentum.

📅 If you’re prepping a property for sale or lease and want to make sure it’s finance-ready, book a call.

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A good lease doesn’t just support the deal—it defends the value.