How to sell a pharmacy at market value (even when the banks aren’t keen to lend)

Pharmacy owners beware! This is a stressful problem you could easily face one day…

Over the years, banks have become stricter in their lending criteria for pharmacy purchases. Whereas 10 years ago, a remaining lease term of 10 years or slightly less may have been acceptable, lending banks will now generally want to see around 15 years remaining on a lease.

So what happens when there’s less than 15 years left on the lease but you want to sell at market value?

Their private sale had fallen through when the buyer failed to secure funding at the price the seller wanted because of the short lease term and a stubborn landlord who didn’t want to extend the lease.

Although best efforts had been employed to get the landlord to agree an extension, having seen this happen countless times before, I suspected the landlord probably hadn’t been given full clarity on the situation.

So I picked up the phone to the landlord’s manging agent and we had a frank conversation about what we were hoping to achieve, why, and the direct benefits the landlord would see as a result.

Thanks to some better communication and a clear breakdown of the facts, the landlord changed his mind and gave us the green light for a new, longer term that would satisfy both banks and buyers.

Not long after, I agreed a sale for my client at full market value, rather than the limited value the client would otherwise have had to accept if he’d wanted to sell based on the original shorter remaining lease term.

When it comes to pharmacy sales, it pays to have experience on your side. If you’d like to talk about how you could one day achieve a fantastic price for your pharmacy, please get in touch.

Scott Hayton

Managing Director
Hutchings Consultants Ltd.
e: scott@hutchingsconsultants.com