Academic institutions face mounting pressure to balance expansion needs with core mission activities. Whether they’re looking to grow their ambulatory care footprint or develop cutting-edge research facilities to maintain competitive advantage, these dual priorities create complex capital allocation challenges.
Of course, it’s essential to preserve as much capital as possible for mission-critical investments. Your institution’s resources should be directed toward research advancements, faculty recruitment, and clinical innovation — not tied up in real estate development.
By leveraging strategic development partnerships, academic institutions can unlock new sources of funding that allow them to expand their research capabilities and clinical footprint — while at the same time optimizing financial resources and protecting capital for core mission activities.
The capital allocation challenge
Every academic institution operates with finite capital resources. This inherent limitation forces difficult choices between investing in research infrastructure, expanding ambulatory care networks, and funding vital scientific initiatives while also maintaining and expanding existing infrastructure, including hospitals, equipment, and electronic medical records. Traditional financing approaches often require institutions to divert funds from core mission activities to support real estate development — or delay critical expansion projects that could drive long-term sustainability.
Current trends are only increasing the tension in this perennial capital allocation dilemma:
- As clinical operations shift toward ambulatory settings, academic health systems must expand outpatient networks, including their on-campus medical assets, to meet patient expectations for convenience and accessibility. This market imperative creates new capital demands that further stretch limited resources.
- External funding uncertainty exacerbates the challenge for research initiatives. When expected grants or philanthropic donations become less reliable, institutions must often reorganize capital requirements, potentially compromising research continuity.
Strategic development partnerships: the key to unlocking flexible funds
Real estate — whether for research or clinical operations — is ultimately a commodity. As much as possible, your capital should be directed toward mission-advancing activities that set your institution apart: scientific breakthroughs, clinical innovations, and educational excellence.
The solution lies in selecting the right development partner.
When you collaborate with an experienced, strategic, and highly specialized healthcare developer like NexCore, you can pursue growth while at the same time:
- Redirecting capital from physical facilities to core research and clinical initiatives
- Accessing flexible funding solutions tailored to your specific objectives
- Driving down development costs by leveraging specialized development and operational expertise
- Maintaining your institutional focus on mission-critical activities
Innovative capital solutions for ambulatory and research facilities
At NexCore, we offer strategic financing options specifically designed for academic institutions like yours. Our approach allows you to develop the outpatient and research facilities you need while maintaining control of your capital resources.
Our financing solutions include:
- Bond or CTL financing
- Synthetic lease structures
- Long-term capital partnerships with institutional investors committed to core real estate assets
- Joint venture structures that can accommodate the academic health system, physician partnerships, and other third-party relationships if desired
- Custom approaches designed to meet your specific financial goals and ownership priorities
The flexibility in our capital solutions can be particularly valuable when developing specialized research facilities or joint ventures with physician partners that fall outside the parameters of an institution’s default financing program.
NexCore’s client-centered approach to capital solutions
Many development and capital partners begin with a menu of predetermined development financing structures and look for ways to shoehorn institutional needs into those templatized options. In effect, they prioritize their own objectives and attempt to shape transactions accordingly.
NexCore flips this funder-centric model on its head.
We don’t believe in one-size-fits-all solutions. Instead, we take a deeply client-centered approach that always begins by listening to you. Our first and most important objective is to understand your institution’s specific expansion and financial goals. Only then can we identify the right development plan — including financing structure — to best support your needs.
Whether your primary concern is achieving the lowest cost of funds, maintaining operational control, preserving capital for research, or creating long-term flexibility, NexCore matches appropriate capital to meet your specific needs.
This approach yields distinct benefits:
- For ambulatory network expansion:
- Capital structures that complement academic health systems’ traditional financing approaches
- Options for physician joint ventures that might not fit within traditional bond financing parameters
- Scalable solutions that support strategic market expansion
- For research facility development:
- Replacement of unreliable capital previously earmarked for facility development
- Efficient real estate solutions that support technological growth and research innovation
- Flexibility to accommodate specialized research requirements
- Protection against construction cost overruns that could impact research budgets
NexCore can match the effective rates academic institutions achieve in the bond market while providing the added benefit of working with a specialized developer. This includes helping institutions avoid construction risks and potential cost increases due to tariffs and other factors.
NexCore’s specialized development expertise: the hidden value driver
The financial impact of partnering with NexCore extends far beyond capital solutions. Our decades of specialized healthcare development expertise translates to significant cost efficiencies.
Consider this example: A healthcare system we recently partnered with came to the table with an internal budget of $20 million for a new ambulatory care center. We immediately demonstrated that the project should really cost more like $12 million — instantly wiping out a 40% premium that provided no additional value.
The culprits:
- Misapplied standards: When institutional and hospital-grade standards are inappropriately applied to specialized projects like ambulatory care and research labs, inefficiencies are all but guaranteed. Using acute care design criteria for outpatient facilities or overengineering research spaces drives excess costs without adding any functional benefit.
- Limited bandwidth and experience: Institutional facilities teams manage multiple competing priorities, limiting their focus on each project. In addition, many lack experience developing niche healthcare facilities.
- Consultant incentives: External consultants prioritize risk avoidance over cost efficiency, leading to overengineered systems.
- Lack of market comparison: Without visibility into comparable projects across markets, institutions struggle to benchmark costs effectively.
Our focused expertise allows us to fully address each one of these challenges. This means academic institutions that partner with NexCore can expect to:
- Avoid diverting capital from research and educational priorities
- Reduce the burden on internal staff who would otherwise manage complex development projects
- Prevent costly design and construction mistakes common in specialized facilities
- Access market intelligence that optimizes both initial development and long-term operations
Working together, we create a solution that is tailored to your institution’s goals while preserving capital for mission-critical activities.
Unlock flexible funds and amplify mission impact with NexCore
Academic institutions deliver their greatest value through scientific discovery, clinical distinction, and educational excellence. Partnership with NexCore enables you to focus your capital and human resources on these core activities while simultaneously advancing your expansion goals.
By matching financial solutions to specific objectives, leveraging specialized development expertise, and freeing internal resources from complex facility planning, we can create financial flexibility that strengthens your ability to fulfill your institution’s core mission for decades to come.Ready to discuss how NexCore can help your institution optimize capital resources for both clinical and research initiatives? Contact our team today to start the conversation.