Tools & Resources
[Tools & Resources]
Real Estate Considerations for Mergers & Acquisitions with insights from Chris Canna, Vice President of Real Estate Development at CIL
When there’s a merger or acquisition, it can be easy to focus on programs, staffing, and financials. But one of the most significant—and most complex—pieces of the puzzle is often real estate, and overlooking it can create costly surprises or integration delays.
To avoid those surprises, organizations need to understand exactly what they’re taking on. That means asking hard questions, verifying details, and bringing in the right experts to guide the process. Here are the key considerations Chris highlights:
Know What You Actually Own
It may sound simple, but start by confirming ownership. “What do you own? What do you rent? It’s easy to say you own a property, but do you own all the rights associated with it?” Chris explains.
Run a full title search to uncover any liens, easements, or deed restrictions that could limit what you can do with the property. The presence of a lien or a use restriction could dramatically change its value—and its fit within your future plans.
Clarify What's Transferable
If the agency you’re merging with leases homes or other properties, review the lease terms carefully. Are leases transferable? Do they require landlord consent upon a change in control? Are there use restrictions that would prevent you from continuing existing services?
“What you think you’re buying might not be what you’re actually allowed to use,” Chris notes. Understanding lease obligations up front can prevent costly complications down the line.
A property’s booked value on the balance sheet may not match its market value—or its value to you as a community residence.
“Typical community residences in Connecticut can be different than what you could get on the open market if you just put them up for sale as single-family homes,” says Chris. “They have value as community residences, but that’s very different from what the general market will pay.”
Analyze what each property contributes financially. What rent is realistic? Are there outstanding debts attached to the property? Are operating costs in line with what you expect? Get clear on both cash flow and fair market value from a real estate perspective.
Assess the Physical Condition
Don’t rely on assumptions about the state of the properties. Conduct capital needs assessments to evaluate the condition of roofs, mechanical systems, accessibility features, and interiors.
“We’ve seen situations where organizations are surprised by the amount of work the homes need,” Chris says. “Knowing this up front helps you plan for future capital expenditures and avoid surprises after closing.”
Bring in the Right Experts
Finally, don’t go it alone. Engage attorneys to review title and zoning issues, environmental consultants if needed, and real estate professionals who understand the unique regulations around community residences.
“If you were buying a multifamily building, you’d run inspections and numbers before closing,” Chris says. “Mergers should be no different. You need someone who knows the steps and how to evaluate them.”
A Clear Path Forward
Mergers and acquisitions can be powerful opportunities to expand services and reach more people in need—but only if you know what you’re inheriting. Taking the time to evaluate it thoroughly ensures your merger starts on solid ground—literally and figuratively.
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