Every commercial real estate broker has experienced the thrill of having a deal hang by a thread while indecisive decision makers weigh in on the transaction’s merits.
“It’s an understandable part of doing business. In the brokerage industry, more often than not, the client you’re working with is unable to say yes to anything but must get approval from others before they can act.
“It’s not easy to find accessible decision makers,” broker Chris Hyldahl explains.
Mr. Hyldahl is managing director and founding partner of Blueprint Healthcare Real Estate Advisors, a national advisory firm that specializes in the senior housing/healthcare industry. He describes Chicago-based Cambridge Realty Capital Companies as a pleasant exception to the norm.
“Cambridge is extremely professional, well-organized, punctual and decisive. When dealing with this firm, there’s no waiting around for a committee or board to pass or fail on a project,” he says.
The decision makers Mr. Hyldahl works with at Cambridge are Chairman Jeffrey Davis and National Originations Manager Hymie Barber, who also is Managing Director of Catalyst/Cambridge Healthcare Finance in Los Angeles, the company’s West Coast business affiliate.
“Cambridge functions as a tightly knit crew that keeps everyone in the loop and makes important decisions quickly. The company doesn’t really have a corporate feel to it,” he noted.
Mr. Hyldahl says Cambridge’s deal-making penchant made the company an ideal partner in an unusual turnaround investment opportunity in rural Indiana. Here, the owner of two under-performing skilled nursing facilities wanted to sell the property and the business brought in to manage the property wanted to buy it.
“There were two major stumbling blocks. The property manager, Transcendent Healthcare LLC of Fisher, Ind., had never been a property owner. And, at the time, funding for any project was tight.”
The solution was for Cambridge Investment and Finance Co., the company’s acquisition arm, to purchase the property and enter into a management consultant agreement with Transcendent. Under terms of the agreement, Transcendent agreed to lease the real estate from two separate limited liability companies created by Cambridge and the firm’s investment partners.
The understanding was that, with help from Cambridge, Transcendent would nurse the properties back to clinical and fiscal health. With this accomplished, Cambridge would arrange desirable HUD financing and sell the properties back to the management company.
Effectively, in the deal that was structured, over a two-year period Transcendent was able to move from lessee to a fee simple ownership position without seeing its real estate costs rise and without making any capital expenditures.
“It was a complex transaction with a lot of moving parts that required decision makers to trust and rely on the competency and ability of their partners to make it happen. In this example, the right decisions were made,” Mr. Hyldahl said.