When Transcendent Healthcare Founder and President Tom O’Niones met Cambridge Realty Capital Chairman Jeffrey Davis at a trade show for the first time he came away from the meeting with this sagacious advice: “When approaching potential financial investors, know what you want and know what you want to ask,” the Cambridge chairman advised.
What Mr. O’Niones wanted most was for someone to believe in him. He had passed up a major promotion at a national healthcare management company to form his own business, Transcendent Healthcare, which was incorporated as a senior care management consulting firm in Evansville, IN, in 2004.
However, from the start, this Hoosier had larger plans. He knew what he wanted was to own and operate his own senior healthcare facilities.
At age 16, Mr. O’Niones got his first after-school job in a skilled nursing home facility. He started with simple tasks like waxing floors but advanced to handling more demanding maintenance chores. While attending Ball State University he worked part time at near-by hospital. After college, he began a 2½ -year internship with Kindred Healthcare, a national healthcare services company that, through its subsidiaries, operates hospitals, nursing centers and other related health and rehabilitation services businesses across the U.S.
At age 23, Mr. O’Niones already was a licensed healthcare administrator. Before setting out on his own he spent several years at Kindred Healthcare developing and honing his management and operational skill sets, often working in turn-round situations.
The next time he met with the Cambridge chairman he knew which questions he wanted to ask. And he ultimately came away with the answer he wanted to hear.
On a temporary contract, Transcendent had been retained to manage two Indiana nursing home properties while the buildings were being sold by an absentee owner. Mr. O’Niones wanted to purchase the under-performing properties and enlisted the help of Marcus & Millichap broker Chris Hyldahl, who brought the deal to Cambridge to see what might be done.
Mr. O’Niones says the deal came together because Cambridge was convinced Transcendent would be able to turn the properties around and increase their value.
As part of a long-term strategy, Cambridge agreed to purchase the real estate and enter into a new management consulting agreement with Transcendent. Under this arrangement, Transcendent agreed to lease the real estate from two separate limited liability companies set up by Cambridge Investment and Finance Co. and investment partners of Mr. Davis.
The understanding was that Transcendent would nurse the Indiana properties back to clinical and fiscal health and that Cambridge would provide desirable HUD financing for the Transcendent Healthcare of Owensville and Transcendent Healthcare of Boonville properties once these goals were met. Finally, when the HUD loans closed, Cambridge agreed to sell the properties to Transcendent.
Effectively, Transcendent was able to move from lessee to a fee simple ownership position on the properties without seeing its real estate costs rise. Also, the fee simple ownership positions did not require Transcendent to make any capital expenditures.
“Because of the complexities and risks involved my attorney urged me not to sign this deal. But I was confident I would be able to hold my end up and believed Cambridge would do the same.
Since closing on the initial properties Mr. O’Niones has purchased a second property in Boonville and also has built a medical clinic and rehabilitation center to accommodate residents.
“Cambridge and Jeff went out on a limb for me and it changed my life,” he said.
Mr. O’Niones says Senior Vice President Brent Holman-Gomez and the unflappable Cambridge staff deserve a lot of credit for making the partnership he formed with the company work efficiently and seamlessly from start to finish.
“Cambridge has an excellent reputation in the industry. The company is exceptionally knowledgeable, resourceful and systematic and it delivers on promises. I’d recommend the company to anyone without hesitation,” he added.