Hammond Hanlon Camp LLC Advises HealthEast Care System in Design and Execution of Integrated Real Estate Strategy
posted on April 18, 2017
ATLANTA — Hammond Hanlon Camp LLC (“H2C”), a healthcare-focused investment banking firm, served as the exclusive financial advisor to HealthEast Care System (“HealthEast”) on three real estate transactions that included the acquisition, monetization and refinancing of medical office buildings.
HealthEast retained H2C in early 2016 to evaluate strategic opportunities for its portfolio of owned and leased healthcare assets by conducting a Real Estate Transaction Alternatives Study (“RETAS”). Through the RETAS, H2C identified three on-campus medical office buildings as candidates for strategic transactions due to several factors, including favorable purchase options and potential value. Collectively, the transactions allowed HealthEast to generate cash and create ongoing savings through a lower cost of capital.
"H2C identified several real estate alternatives and was able to successfully execute a series of transactions that achieved both our strategic and financial objectives," Doug Davenport, CFO at HealthEast remarked.
In Phase I, H2C advised HealthEast on monetizing the Maplewood Professional Building – a 48,000 square foot medical office building located on the campus of HealthEast St. John’s Hospital in Maplewood, MN. H2C conducted an extensive marketing process that yielded several competitive offers; ultimately a publicly-traded real estate investment trust provided the best terms and pricing to win the sale. As part of the transaction, H2C advised on the implementation and structure of a ground lease for the Maplewood land that preserved key control provisions for HealthEast without diminishing the property’s purchase price. The ground lease was a critical objective for HealthEast given the asset’s on-campus location.
In Phase II of the engagement, H2C advised HealthEast on the acquisition and monetization/refinancing of two on-campus medical office buildings – The Birch Center and St. John’s Campus buildings. Both buildings had been 100% leased by HealthEast with future purchase options at terms that compared favorably to market valuations. H2C approached the landlord and successfully negotiated an expedited purchase that facilitated the transaction. Following the acquisition, H2C advised HealthEast on two additional strategies. To generate maximum cash proceeds, H2C sold the St. John’s Campus building at a premium to its acquisition price and restructured the health system’s lease payments. For the Birch Center, H2C advised HealthEast on the issuance of taxable bonds that allowed the health system to continue owning the asset and generate material savings on debt service compared to historical rent payments.
“The RETAS helped HealthEast to better understand its objectives and realize several goals for the health system. With our expertise in real estate capital markets, H2C was able to identify creative solutions that added significant value to HealthEast,” said Rich Bayman, Principal at H2C. Email Rich
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"H2C identified several real estate alternatives and was able to successfully execute a series of transactions that achieved both our strategic and financial objectives."
- Doug Davenport,
HealthEast, the leading healthcare provider in the Twin Cities’ East Metro area, inspires optimal health and well-being with a full spectrum of family health and medical services for the community. Throughout its hospitals, clinics and outpatient programs, HealthEast is dedicated to delivering transformative, compassionate care and a wide range of wellness choices to the many neighborhoods it serves. HealthEast includes Bethesda Hospital, St. John's Hospital, St. Joseph's Hospital and Woodwinds Health Campus. Visit HealthEast at www.healtheast.org.
ABOUT HAMMOND HANLON CAMP LLC
Hammond Hanlon Camp LLC (“H2C”) is an independent strategic advisory and investment banking firm committed to providing superior advice as a trusted advisor to healthcare organizations and related companies throughout the United States. H2C’s professionals have a long track record of success in healthcare mergers and acquisitions, capital markets, real estate and restructuring transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value. Hammond Hanlon Camp LLC offers securities through its wholly-owned subsidiary H2C Securities Inc., member FINRA/SIPC. For more information, visit h2c.com.
Hammond Hanlon Camp LLC