Ashland Medical Office Building

Services Provided : Owner Representation / Real Estate Consulting

THE SITUATION

Samaritan Regional Health System (SRHS) was the owner of a 25+/- acre undeveloped site in a residential section of Ashland, Ohio. SRHS’s long term goal is to create an ambulatory/medical campus on the site in order to maintain and grow market share on the western edge of its market. Several key physicians approached SRHS to acquire several acres of this site in order to develop their own medical office building. SRHS engaged Hplex Solutions to create a partnership with the physicians which would provide the physicians with an opportunity to own the real estate while allowing SRHS to continue to control the development of the overall site.

THE HPLEX SOLUTION

Hplex structured the transaction so as to allow SRHS to maintain ultimate control of the ground and its use through a “participating ground lease.” The physicians became 100 percent owners of the building, which includes SRHS as a tenant in approximately 40 percent of the facility. SRHS, through the ground lease, receives a predetermined percentage of the building’s cash flow that motivates them to help ensure the overall success of the project. The physicians achieved their goal of owning their office space and also benefit from the real estate returns generated through the hospital’s lease. This project served as the impetus of the development of SRHS’ ambulatory campus and created a mutually beneficial partnership between SRHS and several key physicians.Ashland Medical Office Building is a +/- 42,000 square foot ambulatory/ medical office facility located in Ashland, Ohio. In addition to physician offices, the facility includes endoscopy suites, cardiac testing facilities, therapy services and a women’s health center.