MedCraft Healthcare Real Estate

Minnesota healthcare leaders and those new to town, join Jessica Anderson alongside Benjamin E. Davis, Nathan Pulscher, FACHE, and Carolyn Bertling, FACHE tonight for an evening of "Creating Connections." Register here: https://lnkd.in/gEqgj_3y

💰 𝗗𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗶𝗻𝗴 𝘁𝗵𝗲 𝗢𝗽𝘁𝗶𝗺𝗮𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆  Selecting the optimal financing strategy for a healthcare facility project is a multifaceted process that depends on several key factors. • Level of business risk with the programs or services, particularly if they are a start-up venture with a high-risk profile  • Location of a new facility and proximity to a hospital campus • Demographic composition of a market  • Building occupants and the inclusion of independent physicians, joint ventures, or other third-parties  • Creditworthiness of the organization  • Access and availability of capital and other competing needs The right financing strategy for a project is often shaped by these and many others factors. Fortunately, there are a variety of financing sources that can provide the optimal value for the specific needs of the project and organization.  𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗦𝗼𝘂𝗿𝗰𝗲𝘀  1. 𝗧𝗿𝗮𝗱𝗶𝘁𝗶𝗼𝗻𝗮𝗹 𝗗𝗲𝗯𝘁 🏦 The debt and bond markets for many healthcare providers with strong credit ratings and balance sheets continue to be a reliable source of capital. As the financial markets enter what is anticipated to be a period of de-escalation, interest rates and terms should become more favorable for the right facility project.  2. 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁-𝗦𝘂𝗽𝗽𝗼𝗿𝘁𝗲𝗱 𝗣𝗿𝗼𝗴𝗿𝗮𝗺𝘀 🏛️ For healthcare providers in rural communities, the USDA provides highly competitive financing for new facility projects that might not otherwise be available. Because it is a government funded program, it does bring certain complexities that must be navigated and managed.  3. 𝗔𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝘃𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 ⚡ Financing projects with a preferred development partner can be an efficient and cost-effective source of financing particularly when there is a high level of business risk, the building occupancy involves third-party physician or joint venture programs, or speed to market is critical. Because the value of the financing is based on the terms of the lease, it may preserve balance sheet capacity for other strategic investments. 4. 𝗖𝗵𝗮𝗿𝗶𝘁𝗮𝗯𝗹𝗲 𝗟𝗲𝗮𝘀𝗲 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝘀 💵 For not-for-profit providers with investment grade credit, bondable lease structures that provide the balance sheet benefits of a traditional lease at lower interest rates, exemptions from property and sales taxes, and beneficial purchase options are a worthy consideration. The provider’s total occupancy in the building, long-term ownership plans, and credit rating are key factors that determine the appropriateness of this financing option. Throughout the feasibility planning effort for a new facility project, our team helps healthcare providers model and determine which financing strategy best meets their financial and business plan goals. Contact 𝗺𝗰𝗺𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴@𝗺𝗲𝗱𝗰𝗿𝗮𝗳𝘁.𝗰𝗼𝗺 to discuss your next project and how MedCraft can help you determine the optimal financing source.

Important considerations for managing costs with healthcare facility projects that will save you time, money, and resources. Whether ground-up development, expansion, renovation, or acquisition our team MedCraft Healthcare Real Estate is here to make your life easier. #MedCraft

📊 𝗖𝗼𝘀𝘁 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗳𝗼𝗿 𝗛𝗲𝗮𝗹𝘁𝗵𝗰𝗮𝗿𝗲 𝗙𝗮𝗰𝗶𝗹𝗶𝘁𝘆 𝗣𝗿𝗼𝗷𝗲𝗰𝘁 𝗦𝘂𝗰𝗰𝗲𝘀𝘀 Laying a solid financial foundation early in the planning process is critical to the success of any new facility development. It sets the stage for effective cost management, ensuring that all aspects of the project are financially viable and well-coordinated from the outset. By establishing a comprehensive budget early on, project leaders can accurately estimate costs, allocate resources efficiently, and anticipate potential financial challenges. In this series, we have provided insights into capacity planning, site selection, sizing facilities and below we are delving into the crucial role of planning for cost management to ensure a project's success. 𝗞𝗲𝘆 𝗖𝗼𝗺𝗽𝗼𝗻𝗲𝗻𝘁𝘀 𝗼𝗳 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗮𝗻𝗱 𝗖𝗼𝘀𝘁 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 💰 𝗕𝘂𝗱𝗴𝗲𝘁 𝗖𝗼𝗻𝘁𝗿𝗼𝗹 – Cost estimation and early budgeting allows for a more accurate estimation of the overall project costs and cash flow, including construction, materials, labor, and potential contingencies, as well as when funds will be required. We consider each phase of the process as an opportunity to manage, refine, and reduce upfront project costs and ultimately long-term operating costs, while maintaining quality and performance. 🕒 𝗧𝗶𝗺𝗲 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 – Establishing a detailed timeline and critical path schedule serves as a foundation to any project. It also ensures transparency and consensus on key-milestones – allowing for actively managing the schedule and budget versus being reactive. 🛡️ 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 𝗔𝘀𝘀𝘂𝗿𝗮𝗻𝗰𝗲 – Maintaining quality standards and conducting consistent reviews throughout helps maintain a high quality and the ability to address issues promptly. 🔄 𝗙𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝗻𝗱 𝗔𝗱𝗮𝗽𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 – A well-planned project with a clear scope can adapt more easily to changes or unforeseen circumstances without significant disruptions and can flex in size based on project needs or external factors. 🧩 𝗜𝗺𝗽𝗿𝗼𝘃𝗲𝗱 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻-𝗠𝗮𝗸𝗶𝗻𝗴 – Engaging key stakeholders in the decision-making process to ensure an informed, data-driven, and transparent process. This early alignment also allows for strategic adjustments throughout the course of a project. ⚙️ 𝗘𝗻𝗵𝗮𝗻𝗰𝗲𝗱 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗘𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝗰𝘆 – Streamlining processes with clear planning and cost management reduces waste, optimizes operations, maximizes productivity, and drives positive results. We cannot underscore enough the importance of having an established budget and timeline early in the process. Having these key considerations as helps mitigate unforeseen challenges. By investing time and effort in these foundational steps, you’re paving the way for a successful project execution and achievement of desired outcomes. Contact us to learn how our team can help you with your next project 𝗺𝗰𝗺𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴@𝗺𝗲𝗱𝗰𝗿𝗮𝗳𝘁.𝗰𝗼𝗺

🏗️ 𝗥𝗲𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝗼𝗳 𝗘𝘅𝗶𝘀𝘁𝗶𝗻𝗴 𝗥𝗲𝘁𝗮𝗶𝗹 𝗮𝗻𝗱 𝗢𝗳𝗳𝗶𝗰𝗲 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴𝘀 🏥 As healthcare organizations evaluate locations for a new ambulatory care facility, redevelopment of existing office and retail buildings can provide a viable option with potential benefits including: • speed to market by leveraging existing building and site infrastructure  • attractive areas with high traffic, visibility, and abundant parking  • community support to repurpose underutilized buildings To realize these benefits, we recommend a thorough evaluation of the following considerations: 🔑 𝗞𝗲𝘆 𝗖𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗥𝗲𝗽𝘂𝗿𝗽𝗼𝘀𝗶𝗻𝗴 𝗥𝗲𝘁𝗮𝗶𝗹 𝗦𝗽𝗮𝗰𝗲 𝟭. 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗮𝗻𝗱 𝗧𝗲𝘀𝘁𝗶𝗻𝗴: Understand the building’s current state and historical uses. Obtain as-built plans, conduct environmental assessments, site surveys, title, asbestos, lead paint, mold, and indoor air quality to determine the costs of environmental remediation. 𝟮. 𝗣𝗿𝗼𝗴𝗿𝗮𝗺 𝗙𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝗮𝗹𝗶𝘁𝘆: Retail and office locations are not designed for healthcare, it’s important to determine how healthcare programs fit within the building configuration. Develop fit plans to determine whether the building supports operational efficiency and functionality. 𝟯. 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲: Retail and office structures are often designed to lower structural loading criteria. Evaluate load capacities and structural integrity to support additional loads required for major medical equipment and higher intensity uses. Consider if modifications for floor-to-roof heights and new windows can be implemented cost-effectively. 𝟰. 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗦𝘆𝘀𝘁𝗲𝗺𝘀: Commercial buildings typically have basic plumbing and HVAC systems that require enhancements to meet healthcare use requirements like exam room pluming, sterilization, and stringent HVAC ventilation. Healthcare facilities also require an intricate lighting plan, a robust low voltage system, and abundant power to support specialty equipment. Assess the existing electrical system for capacity and safety and plan for necessary upgrades to support healthcare operations and back-up power needs. Additional considerations available at www.medcraft.com/news or click https://lnkd.in/g5UsPYKc 🔍 Informed Decision-Making: A thorough analysis will help determine if a redevelopment is cost-effective, achieves speed to market, and effectively positions healthcare providers in a target market. To assist with evaluating a redevelopment opportunity, we have a team of experts that can guide you through the process. Contact us at mcmarketing@medcraft.com 📄 Learn how we partnered with Yale New Haven Health on acquisition and redevelopment considerations for a vacant Macy’s in Connecticut. [Link to article: https://lnkd.in/gBPe6EDS #MedCraft

🏥 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗦𝗶𝘁𝗲 𝗦𝗲𝗹𝗲𝗰𝘁𝗶𝗼𝗻: 𝗧𝗵𝗲 𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝗰𝗲 𝗼𝗳 𝗧𝗶𝗺𝗲𝗹𝗶𝗻𝗲𝘀𝘀 𝗮𝗻𝗱 𝗠𝗮𝗿𝗸𝗲𝘁 𝗔𝘄𝗮𝗿𝗲𝗻𝗲𝘀𝘀 𝗶𝗻 𝗛𝗲𝗮𝗹𝘁𝗵𝗰𝗮𝗿𝗲 𝗘𝘅𝗽𝗮𝗻𝘀𝗶𝗼𝗻 As ambulatory services and community outreach grow, healthcare providers are increasingly seeking convenient locations, whether in emerging greenfield communities or infill sites in urban and suburban markets. Providers are adopting a strategic approach similar to traditional retailers, prioritizing prime locations. ⏳𝗧𝗶𝗺𝗲𝗹𝗶𝗻𝗲𝘀𝘀 𝗶𝗻 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 A key but often overlooked aspect of strategic planning is the timeliness of implementation. Retailers typically identify target markets years in advance, allowing flexibility to adjust based on changing business and market conditions. However, many healthcare organizations rush into execution without fully considering local market dynamics or the value of patience in acquiring new sites. 📊 𝗠𝗮𝗿𝗸𝗲𝘁 𝗔𝘄𝗮𝗿𝗲𝗻𝗲𝘀𝘀 By carefully tracking market conditions, organizations can secure prime locations at reduced costs or uncover opportunities requiring a longer timeline, such as property aggregation. For example, on behalf of a health system client, we recently facilitated the strategic acquisition of 110 acres of greenfield land, comprising 19 parcels, over 2.5 years for a future hospital campus relocation. Careful considerations in the negotiation process ensured the parcels were acquired for less than their aggregated value, providing both savings and greater flexibility in expanding services at the site. 🛠️ 𝗥𝗲𝗰𝗼𝗺𝗺𝗲𝗻𝗱𝗮𝘁𝗶𝗼𝗻𝘀 𝗙𝗼𝗿 𝗦𝗶𝘁𝗲 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗡𝗲𝘄 𝗙𝗮𝗰𝗶𝗹𝗶𝘁𝗶𝗲𝘀: 1. Implement multi-year planning: Forecast potential needs and continuously monitor the local market conditions. Whether planning for one or multiple locations, the principal remains the same – exercise patience and remain flexible, as the right location may emerge at any time. Being willing to “swap” locations that may be financially and operationally advantageous. 2. Create and Align Your Team: Engage experts early to identify the process, costs, and timeline of any potential real estate transaction. Early involvement allows them to anticipate and navigate potential roadblocks, ensuring they're ready to execute as priorities shift. 3. Control your message: When communicating long-term intentions, maintain flexibility in location priorities. The ability to adjust the order of site implementation ensures the acquisition of the best sites at the best price. Let us help you navigate the complexities of finding the ideal site for your future development project. Leverage our team of experts, exclusively committed to healthcare, backed by decades of experience. Contact us for an informal conversation about how we can partner to meet your needs and make your life easier, reach us at 𝗺𝗰𝗺𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴@𝗺𝗲𝗱𝗰𝗿𝗮𝗳𝘁.𝗰𝗼𝗺 www.medcraft.com/news #HealthcareRealEstate #SiteSelection #MedCraft

🚀 𝗖𝗮𝗽𝗮𝗰𝗶𝘁𝘆 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗳𝗼𝗿 𝗛𝗲𝗮𝗹𝘁𝗵𝗰𝗮𝗿𝗲 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝗣𝗿𝗼𝗷𝗲𝗰𝘁𝘀 🏥 A successful healthcare development project always starts with a sound business plan that clearly defines a project’s success, the underlying risk factors, and the investment of capital and human resources that are required to get the project off the ground. There are several components of a business plan that are particularly important for helping shape a facility plan. The first of which is capacity planning.  📈 𝗩𝗼𝗹𝘂𝗺𝗲 𝗣𝗿𝗼𝗷𝗲𝗰𝘁𝗶𝗼𝗻𝘀: An essential and critical driver of facility capacity planning that ultimately determines the overall size and scope of a healthcare facility. Most often, a new facility project is intended to support the growth of an existing service or the establishment of a new service. There are many factors that help shape the projections such as: • the unmet need in a particular service area • physician recruitment and utilization • market demographic trends • consumer preferences • technology and medical advances While we would expect volume projections to be a precise science, we know from experience that the actual performance can vary widely for a variety reasons. Building it too small risks outgrowing the facility within a matter of a few years. Conversely, building it too large and you risk carrying excessive fixed overhead costs without the necessary supporting revenue. 📐𝗥𝗲𝗰𝗼𝗺𝗺𝗲𝗻𝗱𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗦𝗶𝘇𝗶𝗻𝗴 𝗙𝗮𝗰𝗶𝗹𝗶𝘁𝗶𝗲𝘀:  𝟭. 𝗔𝗽𝗽𝗹𝘆 𝗘𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝘁 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀 - Utilize efficient operational and best practices for future state planning, rather than relying on current methods. Address underlying operational issues to avoid carrying forward workarounds which can lead to unnecessary capacity. 𝟮. 𝗔𝘃𝗼𝗶𝗱 𝗨𝗻𝗻𝗲𝗰𝗲𝘀𝘀𝗮𝗿𝘆 𝗦𝗵𝗲𝗹𝗹𝗲𝗱 𝗦𝗽𝗮𝗰𝗲𝘀 - Only build shelled spaces if there is solid data to support the need within 2 or 3 years. There are some advantages of constructing shelled spaces for economies of scale and speed to market but unutilized spaces that do not generate revenue can create a drag on operational performance. 𝟯. 𝗣𝗹𝗮𝗻 𝗳𝗼𝗿 𝗛𝗼𝗿𝗶𝘇𝗼𝗻𝘁𝗮𝗹 𝗘𝘅𝗽𝗮𝗻𝘀𝗶𝗼𝗻 - Where possible, design and plan your facility so that you can construct a building expansion when the volumes justify a program expansion. 𝟰. 𝗧𝗵𝗶𝗻𝗸 𝗟𝗶𝗸𝗲 𝗮 𝗥𝗲𝘁𝗮𝗶𝗹𝗲𝗿 - When contemplating future growth, consider new locations in an adjacent market that allow you to further expand your market share. Seldom do we see traditional retailers adding to an existing facility, instead they see growth as a launching pad for a new location that allows them to draw an expanded customer base. Stay tuned for expert advice from a team that has been developing healthcare real estate for decades. Contact us for an informal conversation about how we can partner to make your life easier, reach us at mcmarketing@medcraft.com www.medcraft.com/news

Over the next few weeks, we'll be diving into key topics to help healthcare providers navigate the complexities of ambulatory care projects. Here’s what you can look forward to: 🛠️ Pre-Development and Capacity Planning A successful project starts with a good plan. Learn how to benefit from a developer-led process even if you plan to fund the project yourself. 📍 New Ambulatory Development/Site Selection Learn about selecting the perfect site for your new ambulatory project, validating the need for development, and the key factors to consider. 🏗️ Redevelopment in Place / Repurposing of Existing Building Explore how to effectively redevelop or repurpose your current facilities to meet new demands. 📊 Cost Management Get insights into effective project management that saves you time, money, and resources. 💰 Capital Planning Understand the essentials of capital planning to secure funding for your ambulatory initiatives. 🤝 Joint Ventures Discover the benefits of joint ventures and how to create long-term alignment with independent physicians and provider organizations. Stay tuned for expert advice from a team that has been developing healthcare real estate for 40+ years. Contact us for an informal conversation about how we can partner to meet your needs and make your life easier, reach us at mcmarketing@medcraft.com https://lnkd.in/eGqYpaxk #TrustedParnterProvenResults #Healthcare #StrategicPlanning #MedCraft #AmbulatoryCare #HealthcareSolutions #HereToMakeYourLifeEasier #MedCraftTransformingAmbulatoryCare

Through years of delivering cost-effective healthcare facilities across the country, we know how to overcome the challenges that often impede the successful development of ambulatory facilities. Prior to our involvement, we often hear from our clients that: • The project is too expensive  • The project scope does not support their underlying business plan  • The development schedule does not achieve speed to market • The project needs to drive greater physician alignment • There are a lack of cost-effective sites within our target market When these and other challenges arise, MedCraft is here to help! We offer our development expertise as a thought partner to help you identify and address the fundamental issues that may be affecting the feasibility of a project and we offer creative solutions that give you the confidence to move forward.  Contact us to learn how our team can assist you mcmarketing@medcraft.com #TrustedParnterProvenResults #Healthcare #StrategicPlanning #MedCraft #AmbulatoryCare #HealthcareSolutions #HereToMakeYourLifeEasier

The MedCraft team and their families had a great time at the Saint Paul Saints baseball game last week. MedCraft is a proud sponsor of CornerHouse and we look forward to the Take Me Out to the Ballgame every year! This year was another HOMERUN having raised $88,000 to support the CornerHouse mission of keeping kids safe and making healing possible. #TakeMeOutToTheBallGame #SaintPaulSaints #CornerHouse #MakingHealingPossible #ChampionsForChildren #MedCraft