--- title: Connecticut Bans Hospital Sale-Leasebacks as States Turn to Healthcare Real Estate description: Connecticut will bar hospital main-campus sale-leasebacks from July 2027, and other states are adding REIT and sale-leaseback rules for healthcare property. image: https://dane-isaac.com/hubfs/dia-share.png --- [DIA Dane Isaac Associates](https://dane-isaac.com/) [Services](https://dane-isaac.com/services) Sectors [Multifamily](https://dane-isaac.com/multifamily)[Affordable Housing](https://dane-isaac.com/affordable-housing)[Healthcare Real Estate](https://dane-isaac.com/healthcare-real-estate) [Track Record](https://dane-isaac.com/track-record) [Insights](https://dane-isaac.com/dane-isaac-insights) [About](https://dane-isaac.com/about) [Book a call](https://dane-isaac.com/contact) Menu [Services](https://dane-isaac.com/services) [Multifamily](https://dane-isaac.com/multifamily) [Affordable Housing](https://dane-isaac.com/affordable-housing) [Healthcare Real Estate](https://dane-isaac.com/healthcare-real-estate) [Track Record](https://dane-isaac.com/track-record) [Insights](https://dane-isaac.com/dane-isaac-insights) [About](https://dane-isaac.com/about)[Contact](https://dane-isaac.com/contact) [Book a call](https://dane-isaac.com/contact) [All articles](https://dane-isaac.com/dane-isaac-insights) # Connecticut Bans Hospital Sale-Leasebacks as States Turn to Healthcare Real Estate David Opalek August 31, 2026 3 minute read [Market Analysis](https://dane-isaac.com/dane-isaac-insights/tag/market-analysis)[Healthcare Real Estate](https://dane-isaac.com/dane-isaac-insights/tag/healthcare-real-estate) The sale-leaseback has long been a standard way for a healthcare operator to raise capital from its real estate. The operator sells its building to an investor, often a healthcare REIT, signs a long-term lease, and uses the proceeds elsewhere in the business. For an owner-operator with equity tied up in a hospital or a nursing home, it turns that equity into cash without adding a mortgage. At least 25 states have passed or proposed laws tightening oversight of private equity healthcare deals, and some of that legislation now reaches the sale-leaseback itself. Holland & Knight counted nine state bills aimed at sale-leasebacks as of early 2026, most of them in New England. Connecticut passed an outright ban for hospitals. Public Act 26-22, signed in May 2026, bars a licensed acute care or children's hospital from selling the real property that makes up its main campus and leasing it back, starting July 1, 2027. A companion law, Public Act 26-68, rebuilds the state's certificate of need process from July 2027 and requires approval for any real estate sale or lease involving 20% or more of a hospital's total assets. For nursing homes, Connecticut chose disclosure and a capital requirement. Under a law signed in June 2026, starting February 15, 2027, facilities must report the investment entities that own them, a category Holland & Knight says includes REITs. From July 1, 2028, a facility in which investment entities hold 5% or more must carry a bond or insurance policy covering at least 90 days of operating costs. A facility that does not share its ownership information can be fined up to $1,000 a day. ### Other states Massachusetts restricted hospital landlords earlier. A law signed in January 2025 prohibits a hospital from leasing its main campus from a REIT, exempting arrangements in place before April 1, 2024, and adds sale-leasebacks to the transactions providers must report to the state. Washington requires hospitals to notify the attorney general of sale-leaseback transactions. Bills introduced in New Jersey in June 2026 would deny a certificate of need to any project on a site leased from a healthcare REIT. ### Underwriting a healthcare sale-leaseback now The enacted bans are limited in scope: the main campus of a Connecticut hospital, and REIT leases of a Massachusetts hospital's main campus. Holland & Knight notes that provisions passed in one state are often copied and expanded in the next, so the state where a property sits should be checked before a sale-leaseback is priced. For a Connecticut nursing home with investment-entity owners, the deal model also needs the cost of a 90-day operating bond from July 2028. Connecticut's hospital ban takes effect July 1, 2027. A Connecticut hospital that intends to raise capital through a sale-leaseback of its main campus has until then to close it. ### Sources - [Connecticut Office of Legislative Research, Public Act Summary, PA 26-22 (sSB 196)](https://www.cga.ct.gov/2026/SUM/PDF/2026SUM00022-R02SB-00196-SUM.PDF) - [Holland & Knight, June 9, 2026: A Growing Wave of Proposed Legislation in 2026 Targets Healthcare Real Estate Transactions](https://www.hklaw.com/en/insights/publications/2026/06/a-growing-wave-of-proposed-legislation-in-2026-targets-healthcare) - [Connecticut Public, June 8, 2026: Connecticut sets new rules for private equity investment in nursing homes](https://www.ctpublic.org/news/2026-06-08/connecticut-sets-new-rules-for-private-equity-investment-in-nursing-homes) - [Foley & Lardner, January 2025: Massachusetts House Bill 5159](https://www.foley.com/insights/publications/2025/01/massachusetts-act-enhancing-market-review-process-house-bill-5159/) - [Hall Render, July 2026: Weekly Hospital Real Estate Briefing](https://hallrender.com/2026/07/02/weekly-hospital-real-estate-briefing-070626-additional-bio/) - [CT Mirror (Stateline), August 27, 2026: Private equity healthcare deals declined](https://ctmirror.org/2026/08/27/private-equity-healthcare-deals-declined/) **David Opalek** is the founder of Dane Isaac Associates, a real estate capital advisory firm in Columbus, Ohio. [Book a call](https://dane-isaac.com/contact) to discuss a transaction. ## Get new articles by email Commentary on real estate capital markets, housing policy and healthcare real estate, from David Opalek. You will receive Dane Isaac Associates’ articles by email and can unsubscribe at any time. See the [Privacy Policy](https://dane-isaac.com/privacy-policy). ## More on Market Analysis - August 24, 2026 [A $610 Million Behavioral Health Bond Failed. Bond Buyers Asked What Stood Behind the Debt.](https://dane-isaac.com/dane-isaac-insights/a-610-million-behavioral-health-bond-failed.-bond-buyers-asked-what-stood-behind-the-debt) - August 12, 2026 [JPMorganChase Commits $750 Billion to Housing. 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