MEDICAL OFFICE BUILDING PROJECT OVERVIEW
REX Healthcare (a member of UNC Health Care) selected NexCore Group to develop and own an ambulatory care project in Knightdale, NC, a suburb of Raleigh located 10 miles east of the system’s 665-bed hospital. REX purchased a site in Knightdale as part of their ambulatory network strategy to locate outpatient centers in growing suburban communities. REX’s competitors included Duke Medicine and WakeMed, two large health systems with their own ambulatory networks.
The 63,600 SF REX Knightdale Medical Office Building, which was completed in 2009, houses family practice, pediatrics, orthopedics, express care, wound care, surgery, sleep lab, on-site lab, imaging (basic radiology, mobile MRI, digital mammography), foot & ankle, and wellness services.
NexCore’s scope of work on the Knightdale MOB included validation of the site selection, site master planning and entitlements, confirmation of the project-specific service area, compilation of project service area demographics, collaboration with REX in determining the service mix and physician complement, service line planning, preliminary estimate of project cost, project approval, design and contractor selection, physician recruitment/leasing, project ownership/financing, and property management.
Shortly after commencement of the project, Rex instituted a system-wide capital expenditures freeze to normalize its cash flows throughout the system in preparation for going to the bond market in 2009. The system requested creative financing options from NexCore for its portion of off-site and tenant improvement costs to allow the project to proceed in spite of the capital freeze. In response, NexCore structured a variety of options that provided REX with much needed flexibility and kept the project moving forward.
INTEGRATED WELLNESS CENTER
At the time of the Knightdale MOB development, REX Healthcare was operating four wellness centers in strategic locations around the Raleigh-Durham Triangle. In 2010, REX decided to build a fifth wellness center on the Knightdale MOB campus and called on NexCore again to help make the project happen. The objectives of the project were to expand REX’s comprehensive array of medically and professionally supervised health services and fitness programs into Eastern Wake County, increase foot traffic and patient referrals on the Knightdale campus, and capture the full-time presence of a large orthopedic group.
The orthopedic group wanted to be integrated into the wellness center to enhance its visibility and improve patient flow. NexCore worked closely with the architect to develop a creative design and financial solution that not only integrated the wellness center into the existing MOB but also provided the orthopedic suite with a direct connection to the wellness center. In addition, NexCore crafted an attractive lease agreement that enabled the orthopedic group to make a full-time commitment to the Knightdale campus.
The 34,000 SF REX Wellness Center of Knightdale, which was completed in 2012, includes three pools (lap, therapy and spa), steam/sauna/whirlpool room, large indoor track, group exercise and private personal training studios, state-of-the-art cardiovascular and weight training exercise equipment and child activity area. The center is staffed with registered dietitians, personal trainers, exercise physiologists, sports medicine professionals, and others dedicated to guiding members through the steps of personalized fitness programs.
According to Tom Williams, REX Healthcare’s Vice President of Ambulatory Services, the Wellness Center is averaging 10,000 visitors per month and 115 patient prospect tours of the MOB per month. In addition, since the Wellness Center opened in June 2012, REX Family Practice has experienced a significant and sustained growth in volume of 33%, with the Director of Operations projecting additional growth of 30+ percent over the next year. Rex Express Care has also grown by 10-15 percent.