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Case Study

RMI, on behalf of one of our clients, currently has responsibility of a real estate portfolio consisting of 19 medical office and other buildings containing 1.3 million square feet, 569,000 square feet of expense leases, 222,000 square feet of income leases, and 45 acres of land having an aggregate value of approximately $271 million. RMI has assisted in developing and implementing a strategic real estate program with the following successes in:

  • Disposition of 24 strategic real estate assets having an aggregate value of over $72 million; 80% of the assets were sold directly to third parties.
  • Acquired 11 strategic real estate assets having an acquired value of $33 million.
  • Reducing third-party expense lease obligations of approximately 190,000 square feet through consolidation, sublease or termination; aggregate total savings of over $15 million over a three-year period.
  • Assisting in the acquisition of strategic real estate holdings totaling 55 acres having a combined value of $21 million.
  • Increasing rental rates to market values, revising medical office building leases to escalate rents and capture pass-through expenses thereby significantly increasing capitalized values of medical office buildings.
  • Creating stand alone accounting for medical office buildings; implementing cost containment; economy-of-scale vendor bidding and selection; managing capital expenditures in the context of return on investment.
  • Centralizing the real estate decision-making process from 32 people to one person; real estate direction ultimately implemented by RMI in consultation with senior staff.
  • Implementing and controlling strict compliance policies.
  • Creating medical office building RFPs and selecting several third party developers and owners for seven buildings consisting of 600,000 square feet. Negotiated all contractual relationships and deal structure on behalf of and benefit to hospital, including appropriate use restrictions.