Alter+Care provides an innovative form of bridge financing through its purchase option; for healthcare providers who wish to own their facilities, it provides them the opportunity to defer their outlay of capital for up to 5 years while A+C funds the entire development process. Because of After+Care's balance sheet, we are able to fund the entire cost of design, construction and even personal property such as medical equipment and related furnishings through loans that are only at recourse to us. Typically, when a new ambulatory facility is undertaken, a ground lease assures the provider the right of first refusal to purchase the asset should the developer receive a bona fide offer from a third party. Alter+Care has gone a step further by giving healthcare systems the right to purchase a facility even if no alternate offer is procured. The purchase price would be established in advance of construction at a base cost plus investment return which would grow incrementally. For the provider, it’s a form of low-interest financing without the risk.
Alter+Care was an early mover in the realm of ground leases with major hospital systems in order to develop major ambulatory care facilities. Usually ranging in term from 60-99 years, ground leases allow hospitals to maintain control of the use of the facility, including all programming and tenancy in order to abide by their mission. It also allows the hospital to exercise a right of first refusal or a put option to buy the facility if it meets their business goals. Alter+Care structures ground leases with the hospital’s balance sheet in mind, preserving the ambulatory facility from being listed as a liability. In the end, ground leases are a win-win because they enhance the value of the asset and guarantee the alignment of the ambulatory facility with the hospital’s overall strategic and ethical mandate.
embarks on the development of a medical office building, we work with the
hospital to identify the optimal tenants for the new facility. Our team of
leasing experts work to fully understand the medical services programming,
including meeting with the C-suite, and then interfacing with the Strategic Planners to identify the
appropriate service lines and the respective physician practices. Once we have refined the prospect, we
execute concurrent levels of outreach including direct phone calls, eblasts,
advertising and events.
Discussions with physicians or practice managers may warrant drawings
and space plans or even seeking ground lease waivers for specialized services
in the building. Once we reach a letter of intent, Alter+Care works with an
outside architect to do develop drawings and a work letter allowance for
construction. After securing estimates through competitively bidding
contractors, the lease is negotiated and signed. Throughout what may be a six
to nine month process, Alter+Care maintains a low key, straight forward,
conversational tone that carefully preserves the relationship between the
hospital and the physician.
Alter+Care invests its own capital in owning both on and off-campus outpatient facilities, allowing our hospital clients to preserve their financial ratios and cash position. Our balance sheet strength makes it possible to finance a deal with a low cost of capital. We also work with physicians want to invest with us, creating a greater level of partnership and commitment from caregivers, by helping them participate in new income streams.