Page 1

Best Year Ever for Landmark in 2015

Landmark developed this 268,302 square foot Neuroscience Center in downtown Indianapolis for Indiana University and the 747-bed Indiana University Methodist Hospital.

10 Buildings in 2015 Sets Record During 2015, Landmark Healthcare Facilities completed the construction of two outpatient buildings and placed eight outpatient buildings under development or construction. The two completed outpatient buildings and eight outpatient buildings that were placed under development or construction in 2015 set a new business development record for Landmark in a single year. The ten outpatient buildings include an estimated 1,218,564 square feet in the aggregate, with an average building size of 121,856 square feet. The market value of the ten outpatient buildings is an estimated $405.4 million.

10 Outpatient Buildings Located Throughout the United States Three of the ten outpatient buildings that established a single-year business development record for Landmark in 2015 are located in Florida, two buildings are located in Michigan, two in Illinois and one each in Missouri, New Jersey and California.

Mixed-use Medical Offi ce Building for the Jackson Health Systems in Jackson, Mississippi

Seven of the ten outpatient buildings are located on hospital campuses and three buildings are located on outreach sites.

A Look Inside 10 Outpatient Buildings

2

All ten outpatient buildings include physician office space and the outpatient services of sponsoring hospitals, health systems and academic medical centers.

No-Cost Ownership

3

Design Awards

3

Sponsoring healthcare providers and staff physicians who become tenants will participate in the ownership of eight outpatient buildings under the no-cost ownership program of Landmark. Two outpatient buildings are being developed under the credit tenant lease program of Landmark.

University Clients

4

Repeat Business

4

Value of Outpatient Building Portfolio Tops $1 Billion in 2015

Financial Strength

5

New Offices

6

BOMA Recognition

6

Independent Status

7

Hospital Services

7

General Information

8

The market value of the outpatient buildings that comprise the healthcare real estate portfolio of Landmark exceeded $1 billion during 2015. As of December 31, 2015, the market value of the 26 buildings that are under the ownership of Landmark was $1.015 billion. The 26 outpatient buildings that are under the ownership of Landmark are located in 13 states, and include 3,100,801 square feet in the aggregate. The 26 buildings range in size from 44,334 square feet to 268,302 square feet, with an average building size of 119,262 square feet.

New Hires

4/6


10 Outpatient Buildings Set Business Development Record in 2015 The 10 outpatient buildings Landmark completed or placed under development or construction to establish a single-year business development record in 2015 represent the complete range of outpatient buildings. The 10 buildings are located throughout the United States, and the healthcare providers that selected Landmark to develop the 10 buildings include stand-alone hospitals, multi-hospital health systems and academic medical centers.

January 2015 The Oroville Hospital in Oroville, California selected Landmark to develop a 120,000 square foot, $61.5 million Outpatient Complex on its principal campus.

January 2015 Southern Illinois University and the 13-hospital Hospital Sisters Health System selected Landmark to develop a 168,670 square foot, $37.3 million mixed-use Medical Offi ce Building on the campus of the 439-bed St. John’s Hospital in Springfield, Illinois.

February 2015 The 211,975 square foot, $102.2 million mixed-use Medical Offi ce Building Landmark was selected to develop in North Jacksonville, Florida for University of Florida Health and the 695-bed UF Health Jacksonville Hospital was completed and placed in service. The Medical Offi ce Building is located on the campus of a new 92-bed hospital.

May 2015 The 78,557 square foot, $19.1 million mixed-use Medical Offi ce Building Landmark was selected to develop for the 12-hospital McLaren Health Care was placed under construction on an outreach site that is located one-half mile from the campus of the 404-bed McLaren Bay Region Hospital in Bay City, Michigan.

July 2015 The Deborah Heart and Lung Center in Browns Mills, New Jersey selected Landmark to develop a 60,000 square foot, $17.1 million mixed-use Medical Offi ce Building on its principal campus.

August 2015 The 141,625 square foot, $33.3 million mixed-use Medical Offi ce Building Landmark was selected to develop for the 13-hospital Hospital Sisters Health System was placed under construction on the campus of the new 144-bed St. Elizabeth’s Hospital in O’Fallon, Illinois.

September 2015 The 61,607 square foot, $16.1 million mixed-use Medical Offi ce Building Landmark was selected to develop for the 8-hospital Beaumont Health System was placed under construction on the campus of the 250-bed Beaumont Hospital in Grosse Pointe, Michigan.

October 2015 The 96,812 square foot, $44.8 million mixed-use Medical Offi ce Building Landmark was selected to develop on the principal campus of the Truman Medical Center in Kansas City, Missouri was completed and placed in service.

November 2015 The 129,318 square foot, $29 million mixed-use Medical Offi ce Building Landmark was selected to develop for the 1,011-bed Tampa General Hospital in Tampa, Florida was placed under construction on an outreach site that is located 10 miles from the Hospital.

December 2015 The Halifax Health Medical Center in Daytona Beach, Florida selected Landmark to develop a 150,000 square foot, $45 million mixed-use Medical Offi ce Building on an outreach site that [2]

is located 23 miles from the Medical Center.


No-Cost Ownership Opportunities for Clients of Landmark Landmark developed a no-cost ownership program for hospitals, health systems and academic medical centers that would like to participate in the ownership of their new outpatient buildings, but are not prepared to assume the risks and financial obligations that are associated with 100 percent ownership. Under the unique no-cost ownership program of Landmark, healthcare providers that become clients and staff physicians who lease office space in the outpatient buildings of Landmark receive no-cost ownership interests in their new buildings. With the no-cost ownership program of Landmark, healthcare providers that become clients and staff physicians who become tenants receive a significant portion of the cash flow from the operation of their new outpatient buildings and a significant portion of the net proceeds that are realized from future refinancings or an eventual sale. Healthcare providers that become clients and staff physicians who become tenants also receive a significant portion of the tax deductions that result from real estate depreciation. [ Some nonprofit healthcare providers elect to hold their portion of the no-cost ownership interest in one of their taxable entities in order to benefit from the tax deductions. ]

Healthcare providers that become clients and staff physicians who become tenants are not required to invest equity or incur or guarantee debt in order to receive their no-cost ownership interests. As the full-service developer, Landmark provides 100 percent of the equity that is required, obtains and guarantees the construction and permanent loans and assumes all the risks that are associated with development and construction. Ben Checota, the senior vice president for business development of Landmark, said “Healthcare providers and staff physicians who participate in the no-cost owership program of Landmark are not subject to the cash calls that might result from design busts and construction cost overruns or the cash calls that might result from the operating losses that might occur during the lease up period.” Ben Checota continued “We are pleased that the status of Landmark as a family-owned and family-controlled private company enables Landmark to share the financial benefits that result from the ownership of outpatient buildings with healthcare providers that become clients and staff physicians who become tenants.”

We leased and owned 40 percent and our staff physicians leased and owned 60 percent of the space in the Medical Office Building we selected Landmark to develop 10 years ago. Construction lenders were unwilling to underwrite our lease for 40 percent of the space because our Hospital faced significant financial challenges at the time our Medical Office Building was placed under development. Landmark obtained an 80 percent loan guarantee from the U.S. Department of Agriculture to solve our underwriting problem.

Robert Wentz Chief Executive Officer Oroville Hospital Oroville, California

Design Awards for Two Landmark Outpatient Buildings Two noteworthy outpatient buildings Landmark developed for two leading academic medical centers have earned awards for their design excellence. The 268,302 square foot Neuroscience Center Landmark developed in Indianapolis, Indiana for Indiana University and the 747-bed IU Health Methodist Hospital received an America’s Best Buildings of the Year (ABBY) Award from Buildings Magazine. The 211,975 square foot mixed-use Medical Office Building Landmark developed in North Jacksonville, Florida for University of Florida Health and the 695-bed UF Health Jacksonville Hospital received a Merit Award for Design Excellence from the Jacksonville Chapter of the American Institute of Architects. Commenting on the two design awards, Paul McGuan, the executive vice president for architecture and construction of Landmark, said “All the outpatient buildings of Landmark are Class A buildings, and Landmark strives to meet the highest standards of design excellence for each outpatient building.”

Mixed-Use Medical Offi ce Building in North Jacksonville, Florida

Neuroscience Center in Indianapolis, Indiana

[3]


Four Academic Medical Centers Choose Landmark Southern Illinois University and the 13-hospital Hospital Sisters Health System selected Landmark to develop this 168,670 square foot mixed-use Medical Office Building on the campus of the 439-bed St. John’s Hospital in Springfield, Illinois.

Indiana University and the 747-bed IU Health Methodist Hospital selected Landmark to develop this 268,302 square foot Neuroscience Center on the campus of the Hospital in Indianapolis, Indiana.

University of Florida Health and the 695-bed University of Florida Health Jacksonville Hospital selected Landmark to develop this 211,975 square foot mixed-use Medical Office Building on an outreach site in North Jacksonville, Florida.

University of Louisville and the 349-bed University of Louisville Hospital selected Landmark to develop this 189,085 square foot Faculty Office Building on the campus of the Hospital and University of Louisville School of Medicine in Louisville, Kentucky.

Significant Number of Repeat Outpatient Building Clients During recent years, approximately 40 percent of the dollar volume of Landmark was derived from multiple outpatient building client relationships. The 8-hospital Beaumont Health System in Royal Oak, Michigan selected Landmark to develop 3 outpatient buildings that include 268,937 square feet in the aggregate. The 13-hospital Franciscan Alliance in Mishawaka, Indiana selected Landmark to develop 3 outpatient buildings that include 138,674 square feet in the aggregate. The 13-hospital Hospital Sisters Health System in Springfield, Illinois selected Landmark to develop 2 outpatient buildings that include 310,295 square feet in the aggregate. The 133-bed Oroville Hospital in Oroville, California selected Landmark to develop 2 outpatient buildings that include 178,964 square feet in the aggregate.

Riverside Health System in Newport News, Virginia

The 5-hospital Riverside Health System in Newport News, Virginia selected Landmark to develop an outpatient building with 103,737 square feet and acquire 3 existing healthcare buildings that include 284,473 square feet in the aggregate. The 12-hospital McLaren Health Care in Flint, Michigan selected Landmark to develop an outpatient building with 78,557 square feet and acquire an existing outpatient building with 132,000 square feet. Commenting on the repeat business track record of Landmark, Anthony Lampasona, the president and chief operating officer of Landmark, said “We are very pleased that an increasing number of hospitals, health systems and academic medical centers have selected Landmark to develop multiple outpatient buildings for them.”

Beaumont Health System in Royal Oak, Michigan

Franciscan Alliance in Mishawaka, Indiana

Landmark Names Vice President for Strategic Healthcare Planning In October 2015, Landmark announced the appointment of Michelle F. Marsh as the vice president for strategic healthcare planning. She has specialized in healthcare strategic and business planning for 15 years. Ms. Marsh helps the clients of Landmark determine the functions and service lines that are most feasible for inclusion in their new outpatient buildings.

Michelle F. Marsh VP for Strategic Healthcare Planning

[4]

Ms. Marsh prepares comprehensive demographic studies and conducts community needs evaluations. Her professional responsibilities include outcome-based visioning, the development of strategic and master plans, the creation of business models and the preparation of market and demand studies.

The work Ms. Marsh performs to help determine the functions and service lines that are most feasible includes an examination of service line trends and an evaluation of the outpatient services of competitors in the service areas of the clients of Landmark. Prior to her association with Landmark, Ms. Marsh served as the vice president of strategic planning for Broward Health in Fort Lauderdale, Florida, one of the largest public healthcare systems in the United States. Ms. Marsh received a bachelor of science degree in health policy and administration from the Pennsylvania State University and a master of health services administration degree, with a focus on healthcare strategic planning, from George Washington University.


Significant Financial Strength of Landmark As of December 31, 2015, the net worth of Landmark was $243.5 million, the cash position of Landmark was $33 million and the market value of the 26 outpatient buildings that comprise the healthcare real estate portfolio of Landmark was $1.015 billion.

$1.5 Billion of Equity and Debt Financing Landmark is in a position to self-fund all the outpatient buildings Landmark is selected to develop and own. When healthcare providers select Landmark to develop and own their outpatient buildings, the same principals who provide all the professional services that are required to achieve successful development also provide all the capital that is required to fund development and construction. During recent years, Landmark provided more than $1.5 billion of equity and debt financing to fund the development and construction of the outpatient buildings Landmark was selected to develop and own.

As of December 31, 2015, $211.5 million of the $250 million equity line of credit from the pension plan of the IBEW was available to Landmark. With a debt to equity ratio of 75 to 25 percent, the $211.5 million of equity that is currently available to Landmark will enable Landmark to develop and own new outpatient buildings worth $845.8 million. The $250 million equity line of credit from the IBEW is replenished as the outpatient buildings that are financed with the equity line of credit are completed and stabilized.

Debt Financing Sources of Landmark The debt financing Landmark provided to fund the development and construction of the 26 outpatient buildings that comprise the healthcare real estate portfolio of Landmark as of December 31, 2015 was obtained from 12 commercial banks and insurance companies. Capital One McLean, Virginia

Thrivent Financial Minneapolis, Minnesota

U.S. Bank Minneapolis, Minnesota

American Equity Life West Des Moines, Iowa

Regions Bank Birmingham, Alabama

Aviva Life and Annuity West Des Moines, Iowa

Landmark provides the 25 percent equity investment and obtains the 75 percent debt financing from leading insurance companies, commercial and investment banks and other institutional lenders.

KeyBank [ Key Healthcare Finance ] Cleveland, Ohio

PHL Variable Insurance Hartford, Connecticut

$250 Million Equity Line of Credit of Landmark

Comerica Bank Detroit, Michigan

Phoenix Home Life Hartford, Connecticut

Teachers Insurance and Annuity Association of America New York, New York

Country Insurance & Financial Services Bloomington, Illinois

Source of Funds for Outpatient Buildings of Landmark Landmark finances the outpatient buildings Landmark is selected to develop and own with an equity investment equal to 25 percent and debt financing equal to 75 percent of capital costs.

Landmark utilizes the $250 million equity line of credit Landmark received from the $10 billion pension plan of the International Brotherhood of Electrical Workers ( “IBEW” ) in February 2013 to finance the outpatient buildings Landmark is selected to develop and own. The IBEW provides 90 percent and Landmark provides 10 percent of the equity investments that are required to finance the outpatient buildings Landmark is selected to develop and own.

During 2016 and in future years, Landmark expects to receive numerous commitments for debt financing from the commercial banks and insurance companies that have provided debt financing to Landmark over the years.

The developer selection process for our 100,000 square foot Physician Office Building and 500-car parking structure included an evaluation of comprehensive proposals we received from leading developers and multiple meetings with shortlisted developers. We selected Landmark because Landmark was the best fit for Mount Sinai. The tight bayfront site on our campus that was available to Landmark required Landmark to develop a portion of the Physician Office Building on top of the parking structure. The innovative design solution of Landmark produced a combination structure that is attractive and efficient.

Steve Sonenreich Chief Executive Officer

Mount Sinai Medical Center Miami Beach, Florida

[5]


Two New Regional Offices

Special Recognition from BOMA

Landmark established two new regional offi ces in 2015.

The 75,198 square foot mixed-use Medical Office Building Landmark developed in Jersey City, New Jersey for the 316-bed Jersey City Medical Center received “The Outstanding Building of the Year ( TOBY ) Award” for medical buildings from the New Jersey Chapter of the Building Owners and Managers Association ( BOMA ).

The regional offi ce Landmark opened in Jacksonville, Florida in February 2015 is located in the 211,975 square foot mixed-use Medical Office Building Landmark developed for University of Florida Health and the 695-bed UF Health Jacksonville Hospital. The Medical Office Building is located on the campus of the 92-bed UF Health Jacksonville North Hospital, which is currently under construction. The regional offi ce Landmark opened in Kansas City, Missouri in October 2015 is located in the 96,812 square foot mixed-use Medical Office Building Landmark developed for the 256-bed Truman Medical Center. The Medical Office Building is located on the campus of the Medical Center. Landmark operates nine regional offices that are located in the states of California, Florida, Indiana, Louisiana, Michigan, Mississippi, Missouri, New Jersey and Virginia.

MOB in North Jacksonville, Florida

BOMA created the TOBY Award in 1985 to recognize overall building quality and excellence in building management. Considered the most prestigious and comprehensive awards program in the real estate industry, the TOBY Award considers all aspects of building operations, including tenant relations, community involvement, emergency preparedness and security standards and continuing education for building personnel. Commenting on the TOBY Award, Michael Cleary, the executive vice president for real estate development and asset management of Landmark, said “When it comes to the management of outpatient buildings, the accumulated experience and unique property management program of Landmark distinguish Landmark from other property management firms that are not principally focused on the management of outpatient buildings.”

MOB in Kansas City, Missouri

Two New Vice Presidents for Construction Management Landmark announced the appointment of Michael Thiele and Jeffrey Hook as vice presidents for construction management in August 2015. Michael Thiele has been a construction management professional for 20 years, and Jeffrey Hook has been a construction management professional for 16 years.

Michael Thiele VP for Construction Management

Prior to his association with Landmark, Michael Thiele was a senior manager and managing engineer for the Gilbane Building Company, a $2 billion construction management firm that specializes in the construction of healthcare, pharmaceutical and other buildings. Earlier in his career, he served as the municipal engineer for Strand Associates in Madison, Wisconsin and Bergmann Engineering in West Windsor, New Jersey. Mr. Thiele received a bachelor of science degree in civil engineering from Rutgers University.

Prior to his association with Landmark, Jeffrey Hook was a structural engineer and senior project manager for Opus Development Corporation / Opus Design Build. He spent most of his career at Opus as a developer of outpatient and retail buildings. Mr. Hook received a bachelor of science degree in civil engineering and a master of science degree in structural engineering from the University of Illinois at Urbana-Champaign.

Jeffrey Hook VP for Construction Management

We selected another national developer of outpatient buildings and one year later none of our physician office space was under lease, the equity and debt financing were not in place and none of the important development issues were resolved. Our hospital asked Landmark to pick up the pieces of our failed development effort, and our Medical Office Building was placed under construction eight months later – with 90 percent of the physician office space preleased and all the development issues resolved. Working with Landmark has been a very positive experience. Landmark is the best.

[6]

Michael D’Agnes President and CEO Raritan Bay Medical Center Perth Amboy, New Jersey


Landmark Vows to Remain Independent Landmark is family-owned and family-controlled. Joe Checota owns 65 percent and Ben Checota owns 25 percent of Landmark. Joe Checota is the chairman and chief executive officer and Ben Checota is the senior vice president for business development of Landmark. Anthony Lampasona, the president and chief operating officer of Landmark, owns 10 percent of Landmark. During recent years, leading healthcare publications have reported the sale of the outpatient building portfolios and development and property management companies of eight national developers and owners of outpatient buildings. Most of the acquiring companies were multi-billion dollar public healthcare REITs. Other acquiring companies included a venture capitalist and an international builder that does not specialize in the development of outpatient buildings. Two national developers of outpatient buildings were sold two times and one national developer of outpatient buildings was sold three times during the last several years. Several large, public healthcare REITs offered to acquire the outpatient building portfolio of Landmark and the development and property management companies of Landmark.

Landmark declined all offers to sell its outpatient building portfolio and its development and property management companies. In response to inquiries Landmark received from current and prospective clients, Joe Checota said “The outpatient building portfolio and development and property management companies of Landmark are not for sale. Landmark will remain independent, and the Checota family will continue to own, manage and control Landmark.” Joe Checota continued “Landmark recognizes that most healthcare providers want to receive assurance that their developer will maintain ownership of their outpatient buildings for a reasonable period of time. Landmark provides advance assurance to all of its clients that Landmark will maintain ownership of their outpatient buildings for a period of time that is acceptable to them.” Addressing the benefits that result from the independent status of Landmark, Joe Checota said “Because Landmark is independent and family-owned and family-controlled, healthcare providers that choose Landmark to develop, own and manage their new outpatient buildings are not subject to the time-consuming and bureaucratic procedures that characterize the decision-making process of multi-billion dollar public healthcare REITs.”

We closed our 250-bed downtown hospital and developed a 186-bed replacement hospital in the suburbs. The financial benefits our staff physicians received from the no-cost ownership program of Landmark helped persuade them to move from their downtown offices to the Medical Office Building Landmark developed next to our replacement hospital. Landmark leased 88 percent of the space in our Medical Office Building before construction was completed, and 97 percent of the space is now under lease. All the tenants in our building are very pleased with the performance of the on-site property manager of Landmark.

W.F. “Bud” Barrow President and CEO Our Lady of Lourdes Regional Medical Center Lafayette, Louisiana

Significant Number of Hospital Services in the Outpatient Buildings of Landmark Most of the outpatient buildings of Landmark are mixed-use buildings that include both physician office space and the functions and service lines of client hospitals, health systems and academic medical centers.

• 21 imaging centers

• 3 emergency departments

• 16 ambulatory surgery centers

• 6 urgent care centers

• 7 cancer centers

• 12 physical therapy centers

Fifty-one percent of the space in the 30 most recent outpatient buildings of Landmark is allocated for the functions and service lines of client hospitals, health systems and academic medical centers, 46 percent of the space is allocated for physician offices and 3 percent of the space is allocated for retail services.

• 6 cardiac centers

• 6 sleep laboratories

• 8 laboratories

• 5 pain management clinics

• 3 women’s centers

• 4 pulmonary centers

• 6 wound care centers

• 3 orthopedic centers

• 2 fitness centers

• 2 urology centers

• 2 infusion centers

• 3 endoscopy centers

• 2 pre-admission testing centers

• 5 medical education centers

The 30 most recent outpatient buildings of Landmark include a wide range of the functions and service lines of client healthcare providers.

[7]


Landmark executed the plans for our mixed-use Medical Office Building to perfection. The exterior design of our new building is spectacular from all angles, with interior spaces that are beautiful and highly functional. The design award of the Jacksonville Chapter of the American Institute of Architects is well deserved. The work Landmark is performing as our on-site property manager is first rate, and the financial benefits we will receive from the no-cost ownership interest Landmark distributed to us will significantly reduce the rent for the space we leased in the Medical Office Building.

David S. Guzick, MD, PhD President University of Florida Health Gainesville, Florida

The successful development of our new Medical Office Building marks a true turning point for University of Florida Health and the UF Health Jacksonville Hospital. We place great value on our relationship with Landmark.

General Information About Landmark There are two Landmark companies – Landmark Healthcare Facilities LLC and the Landmark Healthcare Properties Fund LLC . Landmark Healthcare Facilities LLC is a leading full-service developer of physician office buildings and clinics, ambulatory care and surgery centers, cardiac and cancer centers, imaging centers, fi tness and women’s centers and laboratories. Landmark Facilities provides all the professional services that are required to design, develop and construct the complete range of outpatient buildings – on a guaranteed-price, full-service basis. Landmark Facilities also serves as the asset and property manager of all the outpatient buildings that are under the ownership of the Landmark Healthcare Properties Fund LLC . The Landmark Healthcare Properties Fund LLC was established to finance and own the outpatient buildings the clients of Landmark Facilities do not want to own. As of December 31, 2015, the Landmark Fund owned 26 outpatient buildings in 13 states that include 3.1 million square feet in the aggregate. The 26 outpatient buildings range in size from 44,334 square feet to 268,302 square feet, with an average building size of 119,262 square feet. The market value of the 26 outpatient buildings that comprise the healthcare real estate portfolio of the Landmark Fund is $1.015 billion. The combined net worth of Landmark Facilities and the Landmark Fund was $243.5 million and the cash position of the two Landmark companies was $33 million as of December 31, 2015. Landmark Facilities and the Landmark Fund are private limited liability companies. The two related Landmark companies are family-owned and family-controlled. The two Landmark companies operate nationwide – from the national headquarters office of Landmark in Milwaukee, Wisconsin and nine regional offi ces that are located throughout the United States.

Landmark Healthcare Facilities LLC | Landmark Healthcare Proper ties Fund LLC 839 North Jefferson Street, Milwaukee, Wisconsin 53202 | Telephone 414.277.0500 Facsimile 414.277.1055

LandmarkLeadership.com

[8]

Landmark Newsletter 2016  
Read more
Read more
Similar to
Popular now
Just for you