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EP113 - Packaging a Practice and Real Property Asset Together With Liam Krahe, Esq.

In today’s podcast interview, I discuss packaging a practice and property together for sale or purchase with Liam Krahe, an attorney at Cohen Law Firm. Cohen Law Firm specializes in representing dentists and dental specialties to either purchase or sell practices and the associated real estate. We discuss how these are valued, structured and some best practices. 

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In this episode, we talk about…

[2:00] – Focusing on the dentistry niche

The firm’s founder, David Cohen, sought to include a real estate component. David specializes in the M&A side, and he saw the need for a real estate specialist as he represented his dental clients.

[2:40] Liam’s background as a real estate attorney

After graduating from the University of Miami, he worked for a real estate agency that specializes in leasing. Liam represented national and international clients in the acquisition and disposition of property. He worked with commercial properties, and as he grew in his practice he began to focus more on office leasing. This experience led into several M&A deals with dental and medical clients, which ultimately led Liam to transition from that firm to where he is now at Cohen Law Firm.

[4:11] How Liam got started with Cohen Law Firm

The firm was an entrepreneurial environment, and David developed fantastic relationships with his clients. Liam felt that he would be well supported as he focused on real estate law, and when David asked him he made the transition to his firm.

[5:59] The moving parts when brokering a real estate deal

Every contract is unique in terms of how it functions. Establishing whether the lease is from a practice entity or a real estate entity, which might be an LLC or a PLC, is an important step in the acquisition process. Liam and his team have a tremendous amount of respect for the brokers they work with, and they recognize that the brokers put the deal together and the attorneys are responsible for getting it to closing and bringing it to fruition. There is also a need to educate the client at times, because there are a lot of incentives to either owning, or to selling and releasing property. Going through all of these steps helps clients to feel up to speed and comfortable with their transaction.

[7:49] When to talk to a lawyer versus a broker

In the role of legal advisors, clients frequently will ask questions regarding how deals are put together, the various conditions of those deals, and the negotiating processes that take place. Ideally, all parties would be involved. The broker puts the deal together, so business points are typically pre-negotiated. 

[10:35] Buying a practice and selling the real estate

When a practice needs to close, it can present a number of legal concerns as well as new leasing agreement complications. When it comes to their business, the firm wants to be as efficient as they can be and to help clients get their deals done quickly and correctly.

[12:26] Typical deal size for dentists’ real estate

In the end, it’s up to the client. A typical range is between 2500-7500 square feetAn investigation by the business will determine if the sale-leaseback arrangement is the case. There may also be a longer due diligence period for larger buildings because of the time spent evaluating leases and inspecting properties.

[14:27] The cost of not leasing property

From a business perspective, having a lease in place is a critical component. It adds to the valuation of the building, as the net operating income dictates the fair market value. You’re doing yourself a disservice if you don’t have a lease in place when purchasing property.

[22:38] Liam’s first job 

A job as a golf caddy in high school exposed Liam to a wide range of individuals and allowed  him to develop interpersonal skills.

[24:38]  What Liam would be doing if he was not an attorney

He would be active in real estate development. He sees a great deal of opportunity in this sector.

[25:25] What Liam is reading for information and inspiration

At the moment he is reading Peter Lindemann’s Letter, a real estate journal that provides a wealth of useful information. He is also reading JP Conklin’s blog (which has an associated podcast – The Rate Guys), which discusses the current state of affairs related to interest rates, derivative swaps, and hedging.

[26:58] What Liam does for daily self-care

Liam tries to work out daily, whether it be lifting or cardio. To start his day, he meditates and prays.

[27:17] Liam’s thoughts on whether leaders are born or trained 

In his opinion, he believes that people are born with leadership traits and an interest in managing other people. In addition, being a leader requires a strong desire to learn and grow.

Links to resources:


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