surplusproperty
CASE STUDY | SURPLLUS PROPERTY

 

 

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CASE STUDY - SURPLUS PROPERTY DISPOSITION CASE STUDY - TENET HEALTHSYSTEM HOSPITALS

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THE ISSUE

Tenet Healthsytem had acquired NME Hospitals which owned and operated Jo Ellen Smith Medical Center; a competing hospital in the New Orleans area with Tenet owned Meadowcrest Hospital.

THE ASSIGNMENT

After closing down Jo Ellen Smith, Tenet engaged SRSA to sell the closed acute care hospital, the adjacent psychiatric hospital and two related medical office buildings all of which were situated on a 26 acre site. The complication was that Tenet would be deed restricting the hospitals against any type of medical use that would compete with their other hospitals. They also wanted a quick sale to one buyer.

THE SOLUTION

SRSA had been given the task of finding alternative uses of the property other than medical and targeting buyers that could redevelop the site. Alternative uses were identified as Senior Living (both assisted living and independent living), Alzheimer and Long Term Acute care (LTAC), a satellite college campus with dormitories, and a geriatric psych hospital. In addition we considered razing the buildings and developing the entire site as a combination of single family and multi family residential.

We developed a marketing campaign that centered around a controlled bid process. Buyers that fell into the categories listed above were identified and contacted via direct mail and by phone. A comprehensive marketing package was developed that outlined the salient information with high level graphics and sent via overnight or hand delivered to interested parties. Property tours were conducted over a 2 week period and a bid deadline with a due diligence timeline and anticipated closing date was set.

SRSA qualified the bidders and narrowed the field to three. Extensive personal interviews were conducted with the Seller present and one was selected (a residential developer). Finally, a contract was executed and after a 60 day due diligence period, the sale closed. Tenet Healthsystem was able to remove this non-revenue producing asset from their books in a timely manner. For SRSA and Tenet this was a true success story.