Ankura Healthcare Real Estate Solutions

THE VALUE OF EXPERIENCE

Healthcare Real Estate Solutions Strategy • Advisory • Development CONTENTS

More than ever before, the alignment of facility resources with an organization’s business and clinical goals are critical to long-term success. Our team of healthcare professionals has been working with leading health systems in this time of transition to create and implement financially prudent real estate investment plans that position health systems to lead the transformation in healthcare. At Ankura, our team of healthcare professionals builds partnerships with clients to advise, manage, and execute strategic capital investments to effectively mitigate the risks inherent in the planning, design, construction, activation, and financing of capital projects. We have a long history of advising through all phases of complex projects to ensure clients deliver on their objectives to improve population health and the patient experience with the right care, the right place, the right time, and at the right cost. Our services include a comprehensive range of facility, real estate, and capital solutions, all focused on helping our clients maximize the operational and financial performance of their real estate portfolios and capital investments.

CAPITAL ASSET STRATEGY PROJECT ADVISORY Our strategy team is on the forefront of developing We advise on complex capital programs serving multi- long-term capital deployment strategies that align our hospital systems, academic medical centers, and clients' clinical and business goals. Our goal is to create community hospitals. We serve non-profit, for-profit, an aspirational, yet achievable plan that puts the client public, and private clients across a broad array of industry on the right path for success. We provide fact-based sectors, which allows us to bring best in class practices to innovative tools, and an engaging process to spur healthcare capital projects and real estate portfolios. Our innovation and make informed decisions about what is extensive knowledge, insight, and proven abilities advise right for their organization. As a trusted advisor, on strategic planning, real estate, financing, program we work to create a facility and capital risk management, compliance monitoring, roadmap that is implementable and project management, construction auditing, optimizes risk and return. accounting, financial controls, and business process improvements.

PROGRAM MANAGEMENT REAL ESTATE DEVELOPMENT We serve as an extension We act as our clients' trusted of our clients' executive development partner to team, as the maestro of major execute an ambulatory network capital improvement programs, plan at the lowest possible cost, i.e., from strategy, team formation, facility medical office buildings with integrated planning, and operational planning to wellness, ambulatory surgery centers, budgeting, design, construction, activation, cancer centers, micro-hospitals, freestanding and transition planning. We ensure projects ED’s, and mixed-use healthcare villages. We have measurable objectives for clinical, help our clients objectively evaluate and operational, financial, and strategic performance. implement financing and ownership structures that Throughout the process we integrate, synthesize, best satisfy their goals for new facility development and facilitate the flow of information to build consensus initiatives. Through our strategic partner, Medicus Capital, among project stakeholders. we have ready access to over $2 billion in capital to fund third-party development projects, tax-exempt operating lease structures, and public-private partnerships.

1 CAPITAL ASSET STRATEGY

We position health systems to deliver value.

OUR EXPERT SERVICES: • Facility master planning • New facility operational and space programming • New campus visioning • Merger and acquisition due diligence and integration planning • Ambulatory network planning and optimization • Lean 3P planning • Organizational cost savings strategies • Financial feasibility assessments • Service rationalization planning

PROJECT 1

Our team was engaged to advise the Mercy Health Network, a 40-hospital network in Iowa, on the scope and scale of a new campus in their market. The current facility was outmoded, difficult to access, and didn’t support current care delivery models. The planning also needed to occur in the context of a sister hospital campus not far from this market location. The team engaged MHN leaders through an innovative planning process that brought facts to the table about the current market situation, macro trends shaping healthcare, and implementable concepts that met financial hurdles. The outcome is a consumer-friendly campus fully aligned with health network resources to deliver value-focused care.

PROJECT 2

Baptist Health South Florida serves more than a million patients every year, with people flying from around the world to visit Miami to consult with medical experts. Ankura’s experts conducted a performance improvement assessment of their 2.5 million square foot non-acute care portfolio and six acute care hospitals. Through our initial assessment, we identified operational savings opportunities of approximately $10 million through a combination of consolidating real estate; streamlining the management reporting structure; re-defining the levels of service in third-party vendor contracts; leveraging technology to improve productivity and efficiency; implementing an energy management system; and centralizing call centers.

2 PROJECT ADVISORY

We serve a broad array of industry sectors which allows us to bring best-in-class practices to capital projects across sector boundaries.

OUR EXPERT SERVICES: • Construction audits/compliance assessments • Business process improvement – optimizing project • Ambulatory facility prototypes, design standards, management policies and procedures and branding • Development and implementation of mitigation • Project efficacy reviews/second opinions strategies for distressed capital projects experiencing continued cost growth, schedule delays, or non- • Financing options assessments compliance issues • Mapping and streamlining business processes to • Optimizing organizational and governance structures prepare for collaborative project management for effective capital project delivery • Portfolio valuation and monetization studies • Implementation and optimization of project • Risk management assessments, cost audits, and management and information management compliance monitoring technology systems

PROJECT 1

Ankura was engaged to evaluate the effectiveness of the project management policies, procedures, and internal controls employed by the University of Iowa Hospitals & Clinics (UIHC) and the construction manager. Advisory included a “front end” risk assessment with the objective to identify opportunities for improvement with recommendations to mitigate identified risks or deficiencies. The primary focus of the following phases was the evaluation of ongoing project management activities and construction costs billed by the CM and trade contractors as well as the evaluation of the organizations compliance with contract requirements, internal policies, and procedures. Results included optimizing the use of technology systems and institutional decision-making processes.

PROJECT 2

Ankura’s healthcare real estate solutions team completed multiple real estate advisory engagements for Texas Health Resources (THR) as part of a major system-wide performance improvement and cost savings initiative. Initially, we conducted a valuation study of THR’s Medical Office Building (MOB) portfolio and a ‘sell vs own’ analysis, totaling 2.4 million square feet. Additional work included a clinic consolidation opportunity assessment for Texas Health Physician Group’s 250+ clinic facilities located throughout the greater Dallas-Fort Worth market area. Ankura identified over $6 million in potential staffing and real estate savings from readily implementable clinic consolidation opportunities.

3 REAL ESTATE DEVELOPMENT

We provide an end-to-end solution to our clients, including third-party financing through our strategic partner, Medicus Capital, a private equity firm focused on investing in healthcare real estate development nationwide.

OUR EXPERT SERVICES: • Third-party development • Zoning and entitlement procurement • JV real estate partnership structures • Financing and ownership structuring • Physician ownership programs • Design/build development • Build-to-suit leasebacks • Healthcare anchored mixed-use development • Tax-exempt operating lease structures • Marketing and leasing • Public-private partnerships • Green and well building strategies • Medical building acquisitions • Asset and property management coordination • Site selection, due diligence, and acquisition

PROJECT 1

Ankura professionals completed a strategic facility plan and served as program manager for KishHealth System’s new $100 million replacement hospital campus located in a rural but rapidly growing market. In addition, we developed a 42,000 square foot medical office building on the new campus under a third-party ownership structure. Our experts developed a creative structure that gave KishHealth, which is part of Northwestern Medicine, an ownership interest in the building without requiring an equity investment. In return, KishHealth leased the additional space needed to satisfy the minimum pre-leasing required by the project lender. This solution helped maintain the desired size of the project to support projected market growth and permit construction to proceed on schedule. The building was 90% occupied upon completion, a win-win result for all stakeholders.

PROJECT 2

The Ankura team developed an 86,400 square foot ambulatory care/medical office building on an off-balance sheet basis for Rush-Copley Medical Center, with whom we have enjoyed a long-term relationship with dating back to the early 1990s when we served as program and development manager for their replacement hospital campus. The ambulatory project included an endoscopy center, women’s center, neuroscience institute, retail space, a multi-specialty clinic that was designed using LEAN design principles, and a 500-car parking structure. We worked closely with Rush system auditors to expedite the review of the transaction structure to ensure all operating lease requirements were satisfied to obtain an opinion letter and keep the project on its fast track schedule.

4 PROGRAM MANAGEMENT

We serve as an extension of our clients' executive team and ensure projects have measurable outcomes.

OUR EXPERT SERVICES: • Program management and owner’s representation • eBuilder enterprise management • Integrated project delivery • Building Information Modeling (BIM) management • Team formation • Constructability/peer reviews • Corporate budget development and management • Technology and FFE coordination • Last planner pull planning • Local and state agency coordination • Evidence-based design solutions • Building commissioning coordination • Master schedule development and management • Activation planning and transition management • Operational and communication planning • Move management

PROJECT 1

Mount Carmel Health System in Columbus is investing approximately $700 million in the Mount Carmel East Modernization Project and Grove City Replacement Hospital Project, which is comprised of a 204-bed greenfield hospital (with new patient tower and diagnostic and treatment platform) and a medical office building. Ankura assisted Mount Carmel with developing their business plan, including validating market specific use rates and volumes in the context of population health management, and final submission to Trinity Health’s corporate leadership for capital approval. We are currently serving as program manager overseeing the planning, design, and activation construction of the multi-year, multi-phase major capital program.

PROJECT 2

Genesis HealthCare System engaged Ankura to develop a master facilities plan for consolidating two campuses, the Good Samaritan Hospital and the Bethesda Care Center, into a single, state-of-the-art health facility capable of competing in the pay-for-performance environment. Inpatient services were consolidated at Bethesda to vacate the inpatient facility at the Good Samaritan campus. A new patient tower was built alongside the renovated Bethesda building, creating a single, expanded medical center. The upgraded medical center includes all private patient rooms and Centers of Excellence for heart and vascular, cancer, orthopedics, women’s health, neuroscience, and emergency and trauma care. Ankura served as program manager overseeing the three year phased $225 million facility consolidation effort and also developed an integrated 60,000 square foot ambulatory facility under a fast track design/build delivery approach.

5 WHO WE ARE

ASSISTED OVER RANKED#2 BY MODERN HEALTHCARE 2017, HEALTHCARE FACILITY DEVELOPMENT FIRMS. 300 HOSPITALS, 18 CONSECUTIVE YEARS, RANKED IN THE TOP 3. HEALTH SYSTEMS, AND IN COMPETITIVE BALANCE ACADEMIC SHEET READY CAPITAL MEDICAL CENTERS ACCESS TO OVER $2BILLION THROUGH MEDICUS CAPITAL

COMPLETED MORE THAN $18 BILLION IN CAPITAL IMPROVEMENT PROJECTS INCLUDING PROVIDING PROGRAM MANAGEMENT SOLUTIONS FOR 20 NEW HOSPITAL PROJECTS AND DEVELOPING MORE THAN 100 AMBULATORY CARE PROJECTS

ABOUT US Ankura is a business advisory and expert services firm defined byHOW we solve challenges. Whether a client is facing an immediate business challenge, trying to increase the value of their company or protect against future risks, Ankura designs, develops, and executes tailored solutions by assembling the right combination of expertise. We build on this experience with every case, client, and situation, collaborating to create innovative, customized solutions, and strategies designed for today’s ever-changing business environment. This gives our clients unparalleled insight and experience across a wide range of economic, governance, and regulatory challenges. At Ankura, we know that collaboration drives results.