AUSTIN, Texas, April 2, 2008 /PRNewswire/ -- North Carolina-based Oaks Development Group announced today the company has closed on Post Oak Center North Bldg. 1 on Park Bend Drive behind St. David Medical Center in Austin, Texas. A 29,724-square-foot Class A medical office building, Post Oak Center North is being converted to Oaks' unique tenant-ownership model.
Oaks' hybrid structure is set up as a single purpose limited liability company (L.L.C.). Tenant partners split ownership interest of 50 percent of the L.L.C. based on how much space they occupy. While there is no capital outlay required for pro rata ownerships, tenant partners have first right of refusal to acquire an additional 25 percent ownership through equity investment. Oaks Development Group retains the last 25 percent of ownership and is responsible for professionally developing and asset managing the property long term. Tenant partners receive distributions of operations profits as well as profits obtained through refinancing.
"The Oaks Development model is a stable opportunity for physicians to build equity in their building without cash upfront," says Kerry Angus, Oaks partner. "In partnering long-term with established medical practices, Oaks manages the property for them -- and for maximized returns."
As a testament to Oaks' long-range vision, the company has built and
acquired 42 assets and retained them all in its portfolio. Over the years,
Oaks has carefully structured its model to minimize costs and maximize
returns on the assets it owns with its partners.
Such refinements include:
-- limiting partner risk by starting to build only after 50 percent of the
building is pre-leased;
-- requiring a minimum of five parking spaces for every 1,000 square feet
-- focusing on properties without restrictions or other limiting covenants
that would prevent the provision of ancillary services by tenants;
-- multi-tiered exit strategies;
-- nesting of complimentary professions to create synergy, increased
patient flow and natural referrals within the project; and
-- designing buildings and practice combinations that enhance patient
The company has found the model works equally well for new construction as well as in the acquisition of existing facilities.
"This concept relieves doctors of having to take time away from their practices to manage property, while still giving them tax benefits and investment income," says Eric Perardi, developer in Oaks' Austin office. The beauty, he adds, is that when doctors can focus on what they do best, they are the ones creating value in the asset. "Shouldn't they also be the ones to benefit?" he says.
MSL Investments principal Sarah Teel is exclusive broker for Oaks' projects in Texas. Teel can be reached at 210-524-8190 or firstname.lastname@example.org.
Oaks Development Group, http://www.oaksdevelopment.net, is a private equity funded real estate investment group specializing in the acquisition, construction, conversion, restructuring and management of medical/professional properties to achieve a consistent long term and stable return for private investments. The Oaks model involves strategically sharing equity in transactions with individual tenants. Oaks Development Group is headquartered in Cary, North Carolina; with offices in Boston; Chicago; Miami, FL; Austin, TX; Savannah, GA; Tampa, FL; and Wilmington, NC.
|SOURCE Oaks Development Group|
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