With todays medical real estate industry thriving, everybody wants to invest. No matter what specialty of healthcare you are in, renting is quickly becoming a thing of the past. Gone are the days of traditional lease programs where all physicians pay rent to a developer and get nothing in return. Hospitals and physicians want ownership, cash flow and equity; they want an investment. Developers are responding to this trend with diverse options for physicians such as condo ownership and unique ownership programs. South Florida based medical real estate developer Rendina Companies is currently implementing a unique ownership program at North Broward Medical Center in Deerfield Beach, Florida.
North Broward Medical Center has partnered with Rendina Companies to develop the 60,000 square foot North Broward Medical Pavilion that will house various medical specialists and primary physicians. Rendina Companies will provide all of the project funding and is responsible for all project development and management. Under Rendina Companies’ Equity Participation Program, tenants of the new medical pavilion will receive a percentage of the equity ownership in this project, with no cash investment.
The Equity Participation Program is structured specifically for hospital and physicians that desire new facilities but are concerned with the cash investment and associated debt. By utilizing Rendina Companies Equity Participation Program the hospital and physicians can enjoy the new facilities without the financial risk. The funding for the project is structured in a manner that neither the hospital nor the tenants in the project have any liability for the mortgage debt.
The Equity Participation Program is simple. Tenants sign a long-term lease commitment for space in the facility and in return become limited partners in the facility and enjoy the benefits of ownership such as net cash flow and equity appreciation. The tenants pay their base rent, plus operating expenses to the partnership. The partnership pays down the mortgage on the building and the cash flow left over is distributed quarterly to the tenants in direct proportion to the amount of space they lease.
“Leasing in the North Broward Medical Pavilion is well underway and the response has been wonderful from the hospital, community and physicians,” stated Daniel S. Messina. “We are pleased that our program has been such a great fit for North Broward Medical Center. We are confident that this project is going to be a major success for all parties involved.”
