You are a hospital administrator trying to raise capital to refurbish the hospit

Question

You are a hospital administrator trying to raise capital to refurbish the hospital. Your local bank is reluctant to lend to you because you already have a large mortgage on the property on which the hospital complex lies. But your bankers tell you that they can lend you more if you reduce your debt by selling your parking lot to some private investors who’ll lease it back to you for the next 50 years. And you’ll have to renegotiate the price of the lease every 5 years. What concerns might you have about this sale-and-lease-back contract?

Explanation / Answer

1). Private investors might demand higher lease payments at the time of renegtiation this leads to uncertainity related to future lease payments.

2). Private investors might sell it to others , there can be further issues.

3).

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