Portfolio

Shoreline Orthopaedics

Project Details


Financing Type:
Refinance | Joint Venture with Hospital
Amount:
$17,700,000
State:
Michigan
This Michigan orthopedic group recently completed a two-phase project which concluded in a joint venture (JV) with a local hospital. The first phase was a $4,700,000 refinance of the group’s current building for cash out to provide equity for a construction loan. While the group initially anticipated a loan of $11MM for phase two, CMAC ultimately structured the financing to secure a higher loan amount, which resulted in less equity required from the doctors. The resulting $13MM loan closed with superior pricing than what the market is currently representing for construction deals across the country.

As the project evolved, CMAC assisted the practice in navigating the investment through different ownership scenarios, including exploring economic nuances of such a project and provisions on the loan agreement for the partnership. With the hospital’s involvement, some complexities were raised from the lender’s perspective. CMAC advised the group on negotiations with the hospital, ensuring the practice could use the entire building as collateral to secure the loan despite the percentage owned by the hospital. CMAC worked hand-in-hand with this group to manage the various entities involved and ultimately secure a legitimate deal (in the bank’s eyes)and a successful outcome for the doctors.