The National Real Estate Market Has a New Contender Named NexCore Group
Under new ownership and leadership, NexCore Group has become its own entity and will build diverse asset class portfolios for its investors. Led by Greg Venn, president and CEO of NexCore Group, the company is now able to offer a full range of real estate services, including development, acquisition and disposition, asset and property management, construction management, and leasing.
“NexCore Group became a separate company to unleash our resources and pursue real estate opportunities that do not necessarily tie to design and construction,” Venn said. “In the previous model, our resources were focused on ground-up development only, which didn’t allow us to solve many of our clients’ real estate needs. They often need to retrofit existing projects, reposition them, or simply recapitalize them. Through this transition, NexCore has raised significant capital – at both the entity level and at the project funding level – will allow us to execute on these solutions.
“Additionally, NexCore was formed to directly address our clients’ requests. Many clients were attracted to us for our real estate and development expertise, yet they had already contracted for design or construction services that historically would have eliminated Neenan from being involved in the project. As an autonomous company, our clients can select NexCore Group wherein we will collaborate with the appropriate client-driven team to deliver the project.”
NexCore Group will continue to work with The Neenan Company in the market, as well. The two companies are currently working on several projects where this teaming is exactly what the client needs. In other cases, in Illinois, Washington and potentially New Jersey, NexCore is underway with other partners.
“We have been able to move quickly and diligently with NexCore as a partner on designing, pricing and contracting for our construction services on the St. Alexius project,” commented Greg Werner, Vice President and General Manager of M.A. Mortenson Company’s Chicago office, the construction manager on the St. Alexius site in Illinois. “We have seen many challenges on this project and the people at NexCore have handled them calmly and effectively. We have created a synergy reassuring the client that delivering a building to fit their needs is the single goal of our entire team. Because of their strong design and construction heritage, they bring an added level of experience to the project and create win-win relationships by balancing the needs of the hospital, consultants and Mortenson. This coupled with their ability to bring a variety of financial options to a client, make them a strong team member. We are excited about this project breaking ground and look forward to collaborating with NexCore Group on future projects.”
The significant outcome of NexCore’s independence is the flexibility of its offer to the marketplace. With new capital attracted to NexCore as the operating partner in a medical platform, the company has the ability to solve intricate real estate problems.
NexCore’s solutions include giving clients a myriad of ownership options and the ability to recapitalize existing facilities. NexCore’s major focus currently is the healthcare industry, which is constantly faced with capital constraints. Medical office buildings (MOBs) are among hospitals’ non-core assets and hospitals investment in MOBs strain on other needs. They have competing demands for capital for new in-patient facilities, new technology equipment, and outpatient surgery facilities among others. Moreover, the real estate needs require different capital solutions. Addressing these concerns, along with the fact that hospitals may lack the time or the appropriate resources in areas like project management and development, is where NexCore provides its solutions.
“Many of our healthcare clients have complex and challenging needs. We help them first through feasibility analysis determining the right program mix that will complement the hospital’s current and expanding services,” Venn said. “By examining current market conditions, depth of demand, and leasing strategies, we construct ownership options that address the leasing and market data. Taking into account the existing assets of the client, we give financial options to address their capital constraints. There are many moving components with significant time investment in order to appropriately address all of our client’s concerns.”
The decision to launch a new company has been proven the right one for NexCore Group. Since the first of the year, NexCore has closed national deals, including a $110 million sale and recapitalization of a seven-building, 450,000 square foot MOB portfolio. The Denver-based real estate firm recently finalized negotiations with the Alexian Brothers Hospital Network for two MOBs in the Chicago suburbs, with associated parking garages and hospital expansions. The projects total 190,000 square feet at a total project cost of $45 million and will be breaking ground later this fall.
NexCore has recently been selected by a hospital system in Washington to build an approximately 100,000 square foot MOB, and the company is underway on a $15 million freestanding, outpatient diagnostic and medical office facility for Elmhurst Memorial Healthcare, also located in the Chicago suburbs. In November, NexCore will break ground on a 40,000 square-foot, $10 million surgery center and MOB in Bend Oregon.
“Working with NexCore has been a great experience,” says Robyn Dermon, President of Health Futures Development Group, a healthcare strategic planning and consulting firm for hospital systems throughout the country “NexCore is unique in its flexible approach to development. In a recently requested proposal to a client of mine, they presented multiple options for the hospital to consider in terms of a project team, design approach and options, construction management and development, project ownership and capitalization, and leasing strategies in order to make the project feasible. The client is the one who decides the approach; they are not pigeonholed into a single solution. NexCore does their homework; they make thoughtful inquiries to dig in and find solutions. We believe that hospitals need “open book”, flexible approaches with no hidden agendas. They need alternative ways to capitalize facilities that conserve their capital for strategic and operational needs. NexCore has helped my clients to do just that.”
Currently, NexCore Group is negotiating an additional healthcare project in Oregon and is considering hospital-based MOB projects in Arizona, Colorado, Indiana, New Jersey, and Texas.
“We expect that the national growth in health care will continue,” Venn said. “However, we are also very interested in the acquisition of certain types of asset classes in other markets outside of Colorado and will continue to offer build-to-suit solutions in the commercial arena as well.”
Given the initial requirement for resources, NexCore Group will be hiring some local and regional talent. Also the goal to build a book of business in that the southeast region in both healthcare and commercial markets will lend itself to a potential satellite office in the future.
“We are honored that our clients believe in us, and we are very excited to grow our firm to meet that demand,” Venn said.
About NexCore Group
For more than 15 years, the entrepreneurs of NexCore Group have created responsive real estate solutions for clients across the United States, generating nearly six million square feet of healthcare, commercial and mixed-use projects for local, regional and national clients. The Denver-based real estate investment firm has placed over $98 million in equity and manages a $225 million, 1 million square foot portfolio. NexCore is focused on both healthcare and commercial projects throughout the U.S. Through national relationships with large and small financial institutions for both debt and equity, NexCore Group offers a wide range of options to make its clients’ projects financially viable.