OrthoCarolina Clemmons

01.

The Issue

OrthoCarolina desired to build a new facility in a high-end submarket of Winston-Salem.

Without internal resources to devote to the management and development of such a project, OrthoCarolina needed a development partner to oversee and execute their vision.

It was important for OrthoCarolina to preserve the right to own the facility without taking unnecessary development risks. Additionally, OrthoCarolina wanted to ensure a developer didn’t make an excess profit as a result of OrthoCarolina’s lease.

02.

The Solution

Davis Moore provided an open book development process with a competitive yield.

OrthoCarolina secured a market rental rate within its long-term lease that included an attractive purchase option, as well as other tenant-dictated terms such as tenant improvement allowances.

All development risk was placed on Davis Moore. Davis Moore provided transparent, weekly updates on the development process that included rezoning, site work on an adjacent parcel, the release of easements, stormwater compliance, and a demanding city design compliance to achieve great exposure for the new building.

03.

The Benefit

OrthoCarolina was able to minimize its risk and time involvement while still securing an investment option to purchase the building.

Using the fixed-price purchase method, OrthoCarolina was able to buy the building well below market value and secure more than 80% of the typical developer profit.

Additionally, the practice was able to avoid funding any money (or guaranteeing any loans)  until the building was delivered and the physicians decided to buy the building.

If the building did not turn out as expected, or the economic environment had changed, OrthoCarolina could easily have elected to not purchase the building.