Solving the Puzzle: Aligning Capital for Healthcare Development Projects
by Albert Lord, Director of Development Finance
One of the most rewarding aspects of working at Anchor is solving the task of aligning capital on our projects. We don’t approach our projects with the mentality of squeezing them into a predetermined box. Instead, we approach each project as an individual puzzle with unique challenges to piece together. Not all projects are the same. Not all capital is the same.
When it comes to the long-term success and sustainability of a healthcare development project, it is important to finance transactions on a case-by-case basis to ensure the capital stack is the most cost efficient, most competitive in the market, and aligns with the financial and operational strategy of the health providers, delivering maximum value for the patients, the physicians, and the investor.
A well-thought out finance plan begins with understanding the health provider’s goals and sensitivities. From there, the preferred capital solution is tailored for a number of factors including balance sheet and income statement treatment, overall ownership cost, flexibility around lease terms, rent constant, and many others.
Generally speaking, our capital strategies fall within two buckets: Developer Capital and Structured Finance. While the former is typically more commonly elected, there are many cases where the best outcome for the health provider and the project results in a structured finance approach. In each case, we’ll analyze all aspects of financial, legal, and operational impacts across a variety of variables to make this decision, alongside our clients.
By matching the capital solution with the health provider’s goals, we ensure we are fulfilling our company’s purpose, which is “Pursuing better healthcare through real estate solutions.” Approaching each project with these things in mind ensures that resources are utilized efficiently and effectively, maximizing the project’s impact on healthcare accessibility and delivery, leading to cost efficient solutions, better patient care and ultimately better outcomes.
