I had a major company contact me about purchasing my center and they wanted me to sign a “no shop agreement.” Why do they want me to agree to not negotiate with other potential buyers?

This organization wants to limit your options and remove your greatest leverage tool—competition. They understand that increased demand for any product (your center) will increase the price and decrease their profits. They will even tell you that they will not participate if there is competition for your center. Ask them why they are calling you if that is indeed the case. We have written an article that better answers the questions and can be read...

How do you understand the art of sales prices – who has use it or lose it money, what management company is going public, who has a strategic need for a center in a certain area, etc?

Great question. A value is for a certain point in time and your center is worth as much as someone is willing to pay for it. If you are looking to maximize your value capture and the terms of the deal, you would conduct what Investment Bankers term the Broad Auction Approach. I typically stay away from the word auction with buyers because the word is what is it is and it sometimes elicits a negative connotation in their mind, but they are smart people and know what we are doing. You would prepare your center then go to market with it. Market it to every conceivable buyer and buyer type for centers like whatever center you are marketing. This process would help you learn the answers to your questions. While granted this process takes a little longer, you will get the answers to your...

Certificate of Need (CON)

A certificate of need (CON) is a legal document that is required in a number of states before proposed acquisitions, expansions, or facility creation. A federal or state regulatory agency must approve the need within the community for new health care facilities. This limits competition and makes existing centers more desirable.