The family business changing the pace of healthcare real estate

The new replacement Canyon Vista Medical Center in Sierra Vista, Ariz., celebrated the opening of its 55,000-square foot, $10.5 million medical office building on the heels of its own launch in late April. Like many hospitals, Canyon Vista opened the facility to augment its patient services and align and retain physicians.

However, Canyon Vista's new facility is not your average MOB. The idea for the building, which includes a physical therapy area with a pool, a pediatric care facility and several medical offices, was conceived just 15 months ago. By the time the hospital crafted and issued a request for proposal, it was about a year away from opening, according to Keith Allen, the vice president of construction and real estate at RegionalCare, the hospital's parent.

"With any RFP the question for developers is, 'How will you achieve our dates?' Not will you, but how will you," said Mr. Allen. Shovels hit ground just 10 months ago in August 2014, and when it opened in May, the facility was 90 percent leased and had commitments for the last 10 percent.

Behind this quick sprint to deal, build and open the MOB is a family business that's making a name for itself in real estate. Rendina Healthcare Real Estate, which was founded by Bruce Rendina, has partnered with hospitals to design, build, own, run and manage MOBs for 28 years.

For the last eight years, however, the company has been led by Bruce's two oldest sons, Richard and Michael. The brothers took the helm at a young age after they lost their father to brain cancer in late 2006. Richard was 27 years old and Michael was 23. The family's youngest, David, officially joined the team two years ago.

"Part of growing up and being the son of Bruce is you're groomed to understand real estate at a very young age," said Michael Rendina, who is now COO of Rendina Healthcare Real Estate.

However, taking a seat at the negotiating table is not simple at any age.

"Stepping into a formal presentation for a multimillion dollar development project at such a young age — there were obvious challenges to overcome. Gaining the trust of our hospital or health system partner was a huge stepping stone," said Richard Rendina, chairman and CEO of Rendina Healthcare Real Estate. "Our track record allowed us to do it." The company already had 75 projects under its belt at that time and it has now completed more than 100, according to Richard.

The brothers have found their youth is an asset as many hospitals look for long-term ownership. The company can offer quite a commitment: It is able to fund projects independently and does not look to sell the buildings at completion.

"We are able to provide long-term ownership to our hospital clients because we do not have an investment horizon attached to our equity. Unlike other developers, 100 percent of the equity required for our development projects is funded by the Rendina family and Rendina principals. That allows us ultimate control on all major business decisions," Richard said. "It allows us to bring a great deal of flexibility and to be relationship-based in our business decisions."

According to Mr. Allen, RegionalCare was impressed by the team Rendina Real Estate brought to the interview, and enjoyed getting to know them. "We liked their track record and their ability. They had resources from within their talent pool and were financially sound."

The team's in-house architect was a huge asset to the project, according to Mr. Allen, as was their experience. Rendina Real Estate offered to use a prototype from a similar completed project to accelerate the process, which added a level of comfort to RegionalCare's decision, he said.

"We were so comfortable in our selection of Rendina that shortly after — about six months — we had an RFP in Paris, Texas, and through similar efforts, Rendina won that one as well."


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