A Statement On Ukraine from Kevin Maggiacomo, SVN President and CEO

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5 for Friday with Mark Alexander of Sperry Van Ness (Mark Alexander)

This week, our 5 for Friday features Mark Alexander, CCIM, Managing Director of Sperry Van Ness (Mark Alexander) based out of Ft. Myers, Florida.

Alexander_Mark1. What is your geographic market and product specialty?
I specialize in NNN medical office sale/leaseback closings and have been the National Director of MOB sales for SVN for many years. I currently host the SVN National Medical Call where I teach fellow Advisors how to work with doctors and list their MOBs. I have closed 87 MOB sales in my career to date located in six different states. Due to working with such a specific product specialty, I do not have a ‘defined’ geographic market, but rather work nationally across the United States, though most deals are in my home state of Florida.

2. What’s your latest best practice tip that you can share?
Get involved, both in communication and collaboration! First, no one will hear from you, and subsequently think of you, if you do not reach out. If you are not comfortable with that, than I suggest you get comfortable.  My two recent listings came about from me sending monthly post cards and a monthly e-newsletter called the “Alexander Medical Report” to my database of doctors who own medical office buildings. To collect additional content for my e-newsletter, beyond my own closings, I set-up a Google alert that sends me links each day to articles published with keywords “Medical Office”. Due to my research, I am able to share news of MOB closings from around the country, in addition to my own, each month. Second, get out there and collaborate with your fellow Advisors! The sales of my two recent listings (in Sebring and Bradenton totaling over $11 million combined) closed due to collaboration with SVN advisors who provided the buyers in each case. For additional information on those deals, see here and here.

3. What’s been the biggest change over on how you run your business in the past decade?
I joined Sperry Van Ness eleven years ago. When I first joined I had a 2000 SF office where I managed multiple Advisors (including the former Mayor of Ft. Myers) and personally did a good amount of office leasing and property management in addition to working on my MOB sale/leaseback specialty. I was spread too thin, in too many directions, all at once.  At one of my first SVN national conferences I was attending a session on “How to grow your SVN business” and I happen to sit next to Mark Van Ness. I mentioned to him that I did a little bit of leasing, property management and sales. Van Ness said, “Property management can be a decent profit center if you have critical mass”. In other words, you need a lot of it to make money. I realized that my dabbling in property management and leasing was eating up my most important asset – my time. It had created an artificial income ceiling for me.  Shortly after that national conference I started outsourcing my leasing and property management to focus on my specialty and passion…which is medical office sale/leaseback.

Before joining SVN, I had been so busy running my business as a small independent boutique firm, I had really not taken the time to look back and analyze my business and how I might improve it. Over the past ten years, thanks to things I learned from SVN, I slowly phased out my office and now work out of my home and focus solely on MOB sale/leasebacks. My model of business in not for everyone but it works for me. I am more happy now and making more money than I ever did in the past.  Thanks to coaching from SVN at national conferences, I had finally realized that I had been a reluctant manager of sales people in my office and my true passion was just working on deals.  SVN gave me the national network and support to compete on the national stage to provide the best possible service for my doctor clients.

4. What business book do you like to recommend to your colleagues?
It can never be just one book. Our business is constantly evolving with changes in the economy and technology so it is important to consistently read as much as you can to keep your finger on the pulse of our industry and your specialty. Earlier this year, I helped an SVN Advisor in Milwaukee list a $35M MOB solely because I had recently attended two national conferences (one in Scottsdale, AZ and one in Miami, FL) on the medical office market. During a conference call, when the Wisconsin MOB seller started telling me what he thought was the state of the MOB market, I was able to correct him and quote national speakers (who were CEO’s of National Health Care firms) from both conferences on topics that countered this seller’s pre-conceived opinions. The seller grew suddenly quiet, and shortly after we signed the listing. That deal is under contract now with a 1031 buyer and due to close near the end of June for $33.5 million. Interestingly, after we signed the contract, the seller admitted to us that every other competing broker who had pitched this listing before SVN had said it would never sell over $30 million.

5. What’s a fun fact that not everyone knows about you?
my new viewAs a shameless sharer of news and family pictures on Facebook, there is probably little that people don’t know about me already. But I can say, the best part of my day is taking our dog buddy for a walk out our front door along the Miami Beach Marina each morning. I enjoy looking at boats while Buddy intently studies the bushes.  The picture to the right shows the view from the 17th floor condo where I live and work. I moved here in April after spending the previous 33 years in Ft. Myers. My daughter Lauren starts college in the fall at FIU in Miami.

*All Sperry Van Ness offices are independently owned and operated.

Mark Alexander Says Change is Coming for Medical Office Building Marketplace

Mark Alexander, CCIM, Medical Office Council Chair
Mark Alexander, CCIM, SVN’s Medical Office Council Chair

SVN’s Medical Office Council Chair, Mark Alexander, CCIM, recently wrote an article for News-Press.com in which he predicts,

The manner in which healthcare is delivered to Americans is changing. Increased demand for new types of medical office building design is part of that, along with locations different from past conventions to meet the needs of healthcare service providers of the future.

To read the article in its entirety, click here.

news press

 

 

 

*All Sperry Van Ness offices are independently owned and operated.

Sperry Van Ness® 2012 Trainer of the Year, Mark Alexander

Mark Alexander, 2012 Trainer of the Year with SVNIC VP of Organizational Development, Bo Barron
Mark Alexander, 2012 Trainer of the Year with SVNIC VP of Organizational Development, Bo Barron

The Sperry Van Ness® Trainer of the Year Award is bestowed to the advisor who most exemplifies the qualities of a high-caliber mentor. In 2012, that advisor was Mark Alexander, CCIM. Mark provides training and shares knowledge with advisors throughout the United States in one-on-one mentoring opportunities, speaking engagements, a monthly newspaper column and by conducting monthly Medical Office Product Council calls.

The Managing Director at Sperry Van Ness/Mark Alexander Commercial Realty LLC, in Fort Myers, Florida, Mark specializes in helping doctors do sale/leaseback transactions on their medical office buildings. Mark has sold more than 79 medical office buildings between Florida, Georgia, South Carolina, North Carolina, and Illinois. He also represented numerous banks selling retail, office and industrial properties in southwest Florida.

As the SVN Medical Office Product Council Chair, Mark regularly shares his knowledge and time with more than 100 people who call in to his monthly council calls. These calls prove Mark’s focused expertise in medical office buildings, as well as his leadership in helping others in the field.

Mentors are people who use their hard-earned experience and insight to help newcomers to a profession. Mark Alexander was a mentor when he used his knowledge, gleaned from years working with medical real estate, to assist one of SVN’s newest franchisees, Laura Salome. Laura, who has a background in pharmaceutical sales and is based in El Paso, TX, was new to the medical real estate arena. Although Laura had secured an appointment with a doctor who owned three medical office buildings (MOBs), she was not sure how to best give a listing presentation to him. Laura reached out to Mark, who put together a custom listing presentation, which he provided to Laura prior to her meeting. Laura and Mark double-teamed the presentation, with Mark on a speaker phone and Laura showing slides and materials in person. This joint presentation was successful, resulting in a signed listing, and has lead to Mark and Laura continuing to collaborate on other listing presentations.

Mark often speaks to groups about commercial real estate. He was the featured office market speaker at several annual CCIM Outlook Conferences in Ft.Myers. He has also hosted and spoken at dinner seminars for doctors in San Francisco, Chicago, Kansas City, Raleigh, Charlotte, Charleston, Atlanta, Orlando, Naples and Fort Myers.

Additionally, Mark writes a monthly column for the Sunday edition of the Fort Myers News-Press on commercial real estate issues.

 

Sperry Van Ness | Mark Alexander Commercial Realty LLC

Mark Alexander, CCIM

Managing Director

 

*All Sperry Van Ness® offices are independently owned and operated.

 

ACA Will Boost Medical Office Real Estate: Outlook for 2013

Mark Alexander
Mark Alexander, CCIM, Sperry Van Ness Product Council Chair for Medical Office Properties

Now that the Affordable Care Act (ACA) has become law upheld by the Supreme Court, the cloud of uncertainty has been removed. This new direction for health care will ensure dramatic change in demand for real estate used by hospitals and doctors.

The ACA will add millions of individuals to the rolls of the medically insured, and this will create higher future demand for health care services. This, in turn, will create higher future demand for medical office space for doctors to treat patients.  There are strong, long-term, underlying business fundamentals for medical office building investments.

This is especially true in my home state of Florida, given the large number of elderly Americans that retire in the state, combined with a large proportion of poor, uninsured and under-insured individuals who will soon be able to obtain health insurance.

There are two main segments of medical office real estate: hospital-controlled buildings and doctor-controlled buildings.

 Hospital-controlled buildings

Health care (HC) systems have been more proactive regarding their real estate needs than doctors over the past three years while the debate raged. While not knowing for sure how reform was going to shake out, most hospitals systems believed change was inevitable, and would lead to more Americans becoming medically insured. Many HC systems have already taken steps to expand their real estate needs to accommodate this anticipated increased demand for care.

Now that the presidential election is over, eliminating speculation about an ACA repeal, many hospital systems across the U.S. are accelerating their expansion plans. HC systems are partnering with developers to construct new projects while others are using sale/lease-back transactions involving existing facilities to self-fund their expansion.

 Doctor-controlled buildings

Most private practice physicians adopted a status quo attitude over the past three years while hoping for an eventual repeal of ACA. This uncertainty fueled today’s pent-up demand for medical real estate that is now being released. This is a new environment for doctors and is causing them to change the way they manage their businesses.

Over the past twenty years, it became common for doctors who owned their own medical buildings to have their medical practices pay rent to themselves as landlords. This was a popular way for doctors to create exceptional “in-house investments” where their medical office building (MOB) investment returns where often remarkable. However, this meant their practices often paid rent that sometimes exceeded fair market rental rates by as much as 200%. When many of these doctor/MOB owner’s decided to sell their buildings prior to retirement, they quickly learned that a sale/lease back to an investor created much higher sale prices than selling to another doctor or even to their own practice.

The reason for this phenomenon is that owner-occupied MOB’s get appraised as though vacant because the appraiser is not allowed to use the existing lease (that would normally drive value higher) because the lease is between related parties and not deemed “arm’s length.” This is good for the acquiring practice but it causes the seller to leave a lot of money on the table.

On the flip side, when the MOB is sold in an arm’s length transaction to an investor and the MOB is then leased back by the medical practice, the appraiser must use the lease to calculate value. The market rent lease steers price much higher and in some cases by as much as 40% higher compared to selling the same MOB to another doctor.

Doctors who understood these advantages employed the sale/lease back approach, often choosing the highest rental rate possible to set the highest possible sales price. This created some eye-popping sale prices and saddled medical practice tenants with very high future rents. Now that ACA is anticipated to bring lower reimbursement rates to doctors in the future, doctors are seeking to keep their overhead as low as possible.

In 2013, I predict that doctors will either choose a moderate rental rate for their lease back future; or they will pick a below market rent sufficient to retire debt so they can lock in the lowest possible rent to maximize future practice profitability. This is the fiscally responsible approach, in my view, and it is one example where ACA is helping to reduce the overall cost of health care in America.

There will also be an increasing trend to make larger medical groups more prevalent. Since ACA rewards doctors who work in bigger groups or alliances, there is an incentive for single practice doctors to merge with larger medical practices or switch employment to hospital systems.

Mark Alexander, CCIM, is the Sperry Van Ness® Product Council Chair for Medical Office Properties. He bases out of Fort Myers, FL.

*All Sperry Van Ness® Offices are individually owned and operated.