Surgery Centers: From Concept to Completion (1 of 2)

Posted on December 4, 2011 by MREA

Surgery Centers are once again in the forefront of healthcare real estate investment discussions. The reason can be viewed simply. Investments from hospitals and fully leased medical facilities did not come to market as originally thought when the recession and health care reform were making everyday headlines and curtailing growth plans for the entire sector. So, as shareholder interest began to subside, and as capital burns holes, investment interest is moving back into this unique sector of real estate.

Thus, developers are actively searching for physician-investors to initiate (or complete) their thoughts of participating in a surgery center investment. This is exciting news for the building industry, most of which have gone unnoticed for a several years. But issues are still abound, especially with building costs relatively unchanged since 2008. So, the costs of building are still somewhat prohibitive and have been one of several factors that have kept some on the sidelines. But, with investors willing to pay a greater amount than the structure is worth, some looking for strategic partnerships prior to building, this sector is receiving a great deal of interest from investors.

Cost Breakdown

A surgery center, shell and interior, can be between $150 per square foot to as much as $300 per square foot, let alone land costs. Any addition or reduction from the initial construction estimate could severely impact physician interest. For example, if 1,000 square feet was necessary for an additional operating room to assist a few physicians, $150,000 to $300,000 in additional construction costs would be necessary, not to mention additional operating costs. Designs have been going back to the drawing board in many situations and any addition or reduction in square footage could cause a change in the function of the building, especially for a fragile physician base that is concerned about future business profits.

Building New or Existing

There are some advantages and some disadvantages when building on a completely new construction site. For example, if you select a previously constructed building, the architect will have existing structures which may somewhat limit the facility design, but, conversely, all site development work will have been done and paid for, and construction time may be substantially reduced. In the flip side, retrofitting existing structures can reduce construction costs but prove devastating if due diligence and architectural redesign are not performed properly.

Standards of Construction

Those who have not previously developed Ambulatory Surgery Centers typically will find that ASC construction is the not the same as medical office building construction. In fact, the two types of structures are fundamentally and structurally different. And, because of the potential life-safety concerns, a single city inspection is becoming replaced by multiple inspections at the city, state, and federal levels.

Federal Regulation

On the federal level, a limited amount of construction data may be found in the Code of Federal Regulations-Ambulatory Surgical Services. We find that most consider the “Guidelines for Design and Construction of Hospital and Health Care Facilities,” produced by the American Institute of Architects, the standard-bearer for construction of ASCs.

State Regulation

When a layman performs an online research on construction standards for Ambulatory Surgery Centers, unfortunately, they will find little uniformity among the states. Some states have no regulations regarding Ambulatory Surgery Centers, while other states have quite lengthy regulations which include facility standards. Some states have adopted national construction codes and include a virtual itinerary of codes for ambulatory surgery center construction.

Construction Team

Often we tend to think of a construction team simply, beginning with a general contractor, when in fact the surgery center team consists of several more contributing members. The architect, the engineer, and on occasion, structural and civil engineers will play a role in surgery center development. The cost for each of these team members may increase the overall construction costs, but is likely necessary component to a fully functional facility. An ASC is a complex facility which requires special attention and experience on the part of the entire design team.

General Contractor

When selecting a contractor, always search for one who has performed similar medical projects, preferably Ambulatory Surgery Centers. It is essential to verify the references of your general contractor, AND that of the proposed subcontractors to ensure they meet healthcare requirements. The construction process can be a lengthy process, and at times uncomfortable, so be careful when selecting a relative or acquaintance as your contractor. The point person on your project should be the construction superintendent and not necessarily a good friend.

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This post is an abbreviated version of an entire article written by Robert S. “Bob” Lowery. For the complete article, please contact our office or your local Texas MREA representative.

Valuing Medical Real Estate on Cap Rates…Fuggedaboutit!

Posted on November 27, 2011 by MREA

Physician and investor ownership of medical income property still sits as a relative newcomer on the expansive list of commercial real estate investments, which includes office, retail, industrial, among several others. All-in-all, there may be over 100 specialty and categorical types of commercial real estate investments if broken down by industry and tenancy (single, multiple).

Commercial real estate brokers typically will arrange all investments alike, utilizing a simple formula known as cap rate pricing so as not to confuse or curtail into any real estate investment type. But, every commercial property user (from Fortune 500 company to auto repair franchise) and investment (fully-leased hospital medical office building to empty warehouse) is uniquely, comparatively different. So, to achieve proper valuation the asset needs to be compared directly to those of competitive properties with a percentage emphasis on who transacted, why and how, as well as economic conditions within the submarket, city and national economy. It is our experience that most buyers and sellers will place a greater weight on certain factors when transacting, especially when motivated by a needs or capital availability basis. This is botched recipe that has led to the relative uncertainty for our sector as a whole.

So, it takes a skilled eye and real-time comprehension of certain functionality of business and investment types, as well as a wide array of financial and economic data points to properly price and transact in the commercial real estate marketplace. Unfortunately, just a handful of brokerage platforms adhere to a heightened sense of knowledge and disclosure when advising their clients, primarily due to inefficient formulas for pricing commercial property. While this is certainly not a testament against commercial real estate brokerage platforms, it is a testament about a vast investment class that in some conversations remains broken based on inefficient pricing mechanisms, one of which includes cap rate pricing.

Example.

A cardiovascular care facility has a Net Operating Income of $100,000, and the sales price for the property is $1,000,000, therefore the cap rate is 10%. Most property investors, and now physician investors, are becoming more comfortable with this simple strategy of valuing a property for the purposes of an exit basis.

But, what does a cap rate of 10% tell you? Let’s first discuss what it does not tell you.

A cap rate does not tell you what your return will be if the property requires financing. With an overwhelming majority of property requiring financing and terms changing daily, what are the costs of capital? Nor, does it appropriately account for tax and interest calculations either. It cannot pit an apples to apples comparison of unique property characteristics. It does not tell you who, what, why, how or where. Prior to contracting on a needs or investment basis, it is very important to know the competition in the market and how, why they can transact at certain levels. Simply doing some quick math to obtain a cap rate does not accomplish this.

If not healthcare real estate, we will be happy to direct you to advisors with a keen eye on the rolling ball. If your physician, user or investment group needs to determine the price of which to contract in the today’s commercial real estate market, please contact us for a proven transactional formula that may lead to a higher or lower price dependent on a variety of factors.

PWC/ULI: Texas Buoyed by the Three US Employment Drivers

Posted on November 19, 2011 by MREA

One of the most popular reads for the commercial real estate industry, the PWC/ULI Emerging Trends for Real Estate 2012 suggests Houston is very well positioned to capture investment dollars with strong medical, increasing technology sector and high oil prices.

Interesting excerpts:

1. Trophy and Medical Offices. Gateway class A office space always commands attention, but interest flags elsewhere, especially in the suburbs. Expect slim pickings when dipping into second-tier cities, and forget about office parks. Niche-sector, medical office space gains favor: “The tenants are recessionproof,” and “the health care act will help spur demand as more hospital procedures move into doctors’ offices.” Over the longer term, a bulging senior citizen population promises to expand needs for various outpatient facilities and clinics.

2. If real estate is “all about jobs,” then head to the few cities where employment growth actually occurs. Besides the gateways, the current front-runners rely on energy, high tech,
and health care–related industries, as well as universities and government offices. Austin becomes a current favorite because it claims all these attributes. Bigger Texas cities—Houston and Dallas—also sustain investor interest because of their energy backbones.

3. Pockets of hiring occur in certain industries and parts of the country:

The strong energy sector, driven by current ■■ high oil prices, helps Texas cities and some out-of-the-way places like NorthDakota (“not exactly a happening real estate market,” says an interviewee).

■■ Technology boosts northern California, the Seattle area, Boston, and smaller high-tech markets like Austin and Raleigh-Durham.

■■ Health care expands everywhere. The steadily graying population needs more medical attention, but work skews to lower-paid aides or highly skilled doctors, nurses, and
technicians.

4. Until recent energy industry gains, hot growth cities Dallas and Houston consistently registered lagging investment ratings. As long as oil and gas prices remain high, these markets will continue to make survey inroads, but investors should remain wary of historic volatility resulting from a lack of geographic and zoning barriers to restrain development.

5. Health care trends—rising older demographics and skyrocketing costs—make medical office space a logical play, but this niche sector with limited opportunities investing
in smaller buildings could easily be overwhelmed by capital.

Hospital Real Estate Strategy: 2012 and Beyond

Posted on November 14, 2011 by MREA

The following approaches, which are being implemented by hospitals and indicative of the strategies that our firm is undertaking, are beginning to take effect across the nation.

Monetization.

For an example, Baylor Health Care System chose to extract capital from its existing medical real estate portfolio through a real estate monetization process. In addition to generating funds that could be used to support new strategic initiatives, the system’s leaders believed that the proceeds generated from the disposition of to-be-constructed and existing facilities would enable the organization to obtain more favorable debt yields, as the liquidity from the monetization was perceived as a positive offset to the new liabilities it will pose. In this case, the health system started the initiative by identifying and qualifying real estate advisors. The organization selected an advisory group that had the capabilities of analyzing both owned and leased real estate, had access to an extensive database of investors and developers, and was experienced in working with physician real estate owners. After running a competitive bidding process, the health system selected one group to acquire its real estate portfolio. The transaction generated a tremendous amount of liquidity for the health system and created a future real estate partnership. The formal transaction process also served to inform major healthcare real estate investors/developers of the health system’s growth strategy. Doing so has created a potential set of financing options for the organization’s future real estate development capital needs. Any monetization process does not come without its challenges, however, given the fact that several potential parties may become involved (health systems, developers, investors and physician group owners, international, etc) seeking to purchase the facilities, all with separate, unique objectives. Also, the time required for the ideal purchaser to perform due diligence is usually much longer than what is anticipated. However, if the purchaser is knowledgeable about keeping open transparency, it alleviates the concern that may be among the staff and physician groups who have knowledge of the potential transaction.

Renovation.

Another approach that which will save cost and time, one that we will see for years to come, is to renovate existing facilities rather than building new. Clear Lake Hospital recently decided to redevelop/expand the woman’s and children’s units as well as the Heart and Vascular unit. They are incorporating a new 150,000 square-foot facility Patient Tower with state-of-the-art operating rooms, pre-operating and recovery rooms plus a 30-bed adult ICU. As hospitals will continue their growth via acquisition or partnership with physicians, new facilities are necessary in a competitive healthcare arena. As hospitals slow their growth, they will monetize and either pay down debt, growth through outpatient facilities, search for other partnered projects or renovate other existing facilities.

Cost Control.

Materials costs are another area that hospitals will be more aware for expense control. As an example of this approach, a hospital that our firm has negotiated, sought bids for the development of a new satellite medical office building. The process yielded many proposals, but one developer’s proposal to use tilt-wall construction for the building, rather than a more costly method, was deemed more favorable than the others. The developer’s construction budget was approximately a moderate percentage lower than that of other bidders. After careful consideration, the hospital ultimately chose the developer for the project—with favorable results. By keeping the construction costs low, the facility has been able to attract tenants with market-competitive rental rates as well as construct a well built facility that will endure the elements.

Joint ventures.

Real estate owners have enjoyed attractive financing by using sizable portfolios of real estate as collateral for bank loans or lines of credit. Hospitals that partner with a real estate investment trust (REIT) or a private real estate company can also benefit from the partner’s core “real estate competency.” For example, real estate companies are able to bring services such as property management, development, and space planning services to the hospital’s assets. Some also are able to share savings related to the packaging of the medical facilities that they may acquire or develop, creating cost savings opportunities through economies of scale. As is typical of such arrangements, once the medical facility was completed, the real estate owner became the landlord and leases the facility back to the hospital, thereby allowing the hospital to simply play the role of tenant and focus on its core competency: providing healthcare services. This underscores the symbiotic relationship between real estate owners and their healthcare clients which will be more prevalent in the future as hospitals exit the real estate business. The owner-partner will rely on the medical tenants’ present and future credit quality for their own cost of capital, so they have an incentive to align their interests with those of their tenants. This relationship between the hospital and the real estate capital source allows the hospital to focus its funds on its core mission.

Robert S. “Bob” Lowery is Managing Partner with MREA | Medical Real Estate Advisors, a full-service Houston-based healthcare real estate firm.

A Dirty Issue: The Handling of Medical Waste

Posted on November 6, 2011 by MREA

The creation and disposal of medical waste should be addressed in a lease for medical office space. Generally, medical waste regulatory acts define what medical waste is and establishes methods for handling and disposing of waste. Each medical entity that is subject to such the act is typically required to register with a state agency, such as the public health department, and have a documented medical waste management plan. These acts contain specific requirements for the packaging, containment, handling, disposal and incineration of medical waste. Regulatory requirements typically treat medical waste differently from that of hazardous wastes. Accordingly, the types of hazardous wastes provisions in standard ofﬁce leases usually include a supplement with a provision that speciﬁcally addresses medical wastes and the obligations of the landlord and tenant with respect to the disposal of the waste.

Commonly, the tenant that generates the medical waste is also liable for properly handling and disposing of the medical waste. Careful drafting by an attorney is necessary to ensure that the lease properly delegates the responsibility for disposing of this waste.

Even when the landlord assumes the responsibility for removing the medical waste from the building, the tenant often is required to store the waste it has generated within the premises until the landlord’s medical waste disposal company picks up the waste for the building. These obligations must be carefully detailed. Tenants should consider requiring the landlord to hold the tenant harmless once the landlord takes possession of the waste, such as when the waste is placed in a common area designated by the landlord to receive medical waste.

A very critical aspect of identifying each party’s responsibilities is determining what is meant by “medical waste” or “infectious medical waste” as the obligations for handling each may be somewhat different. Generally, medical waste is a more inclusive than infectious waste.

A lease should require the tenant to immediately separate any medical or infectious medical wastes, upon production or generation, from other types of office waste and place such waste in a container that is marked “biohazard,” “infectious medical waste” or the like. The drafted lease can further specify that the container be leak-proof, moisture-proof, puncture-resistant, or has the strength to resist, tearing, ripping, or bursting in the course of normal usage or handling.

Landlords commonly prefer that the tenant contract directly with an appropriately licensed medical refuse company which operates in compliance with all federal, state and local laws, rules and regulations pertaining to the removal and destruction of medical waste. This limits the liability of the landlord should a tenant fail to remove medical wastes. Our office has seen landlords protect themselves by adding language regarding the failure of a tenant to remove medical waste whereby including a provision that gives the landlord the right to remove the medical waste and then bill the tenant for the costs of removing such waste.

If the landlord agrees to dispose of medical wastes generated by the tenant, then the lease may create liability for the landlord beyond just the care of the medical waste itself. Such liability is based on the landlord’s control over the premises. If the landlord allows medical waste to be stored outside of a tenant’s space, then the landlord assumes liability for the ultimate disposal of such waste. Thus, the landlord needs to give contractual control over the medical waste storage areas to the tenants and prohibit storage of medical waste in common areas or other areas under the landlord’s control.

Additional issues can arise upon termination of a lease if the tenant has not removed all of its medical wastes. Under a nuisance theory, a landlord may be liable for hidden dangers of which a new tenant has not been informed.

If landlord is responsible for disposal, it is imperative that the landlord provide such information to janitorial services in a building. The landlord needs to ensure that these workers are adequately trained to recognize the containers that are marked for medical waste and to avoid handling the containers marked for medical waste. Additionally, such workers should be informed to recognize medical waste that may have been inadvertently left open and how to place such medical waste in an appropriate container or more likely a scenario; notify the tenant to do so. Indemnification provisions should deal with this as well.

Conclusion

Given the danger of medical wastes to the lease space, property and community if improperly disposed by a tenant or landlord, our office recommends working with a knowledgeable medical real estate brokerage and attorney to assist with several strategies of dealing with consequences of medical waste on real estate transactions.

Alternative Ways of Purchasing Medical Real Estate

Posted on October 31, 2011 by MREA

The most common ways of purchasing medical real estate is through direct purchase, participation in a real estate partnership vehicle with other investors [such as general partnerships, limited partnerships, various corporate entities, and, in Texas, limited liability companies (LLCs), as well as investments in real estate securities such as Real Estate Investment Trusts (REITs).

Alternative Ways of Purchasing Medical Real Estate

Section 1031

Real estate can be acquired via tax-deferred exchanges under Section 1031 of the IRS Code, in which a client “trades” one investment property for another, deferring the taxes due on the sale of the exchanged property. This allows the doctor to reinvest “pre-tax” dollars in another real estate investment, potentially benefiting from appreciation on the larger investment. The physician may also exchange one larger property into two or several smaller properties and pay tax consequences for each one as those properties are sold as cash is needed.

Tax and Risk Management

The way a physician takes ownership of real estate will affect the tax treatment of income and profit. For example, having an LLC-owned investment property will provide him/her with the same protection from individual liability as a corporation, while allowing him/her to have much more favorable tax treatment. Real estate can be bought directly by purchasing it in the following manners:

1. Paying cash,

2. Paying a cash down payment and acquiring a loan,

3. Paying cash to the seller who is financing, or

4. Financing the purchase by using either new real estate financing, seller financing, or credit borrowing when a lender is willing to loan solely on the strength of, and the financial statement of, the borrower, or a combination of these.

Trading and Secured Loans

Real estate also can be acquired by trading other valuable assets, sometimes in combination with financing. A client can obtain interests in real estate by making loans on real estate assets that are secured by a deed of trust or a mortgage. Another method is to invest as a participating lender. In such an instance the borrower needs to agree to provide equity kickers or participation in cash flow whereby the lender (doctor) can benefit directly from the real estate performance.

Equity Participation Plans

With an equity participation, the physician-investor can profit or gain from the sale of the property, sometimes in a preferential manner (i.e., the money the doctor loaned is returned, with interest, and a predetermined percentage or portion of the gain is given to the owner/borrower before distribution of the sales proceeds). Similarly, the doctor can participate in annual cash flow, giving a fixed or a fluctuating amount depending on the performance of the investment. As a lender, many of the benefits of ownership of real estate are not available to the MD, but the doctor should have a security interest in the property and no direct responsibility for operation of the real estate investment. Also, if possible, the borrower should provide additional guarantees of performance. The borrower could do this by providing additional security, such as the deeds of trust on the borrower’s house, other real-estate, and the acquired property; bank letters of credit; or guarantees of performance from people other than the party to whom the money is originally loaned.

Assessment

If a physician-investor is considering acquiring or lending on real estate, s/he should check with his professional advisors, including accountants and attorneys, before proceeding. The doctor’s attorney should review any contracts or agreements before the client signs anything. The physician also will need a due diligence review to ascertain both the relative values of the real estate on which money is being loaned and the borrower’s track record and background.

Two Hospital-Physician Leasing Scenarios

Posted on October 24, 2011 by MREA

1. The Unpleasant Surprise:

The hospital performs a routine audit of physician leases on file. The audit reveals…

Nearly two years of Consumer Price Index (CPI) increases have not been collected. A cardiovascular group that occupies 10,000 square feet of space within the building is to be informed that $5 per rentable square feet was undercharged.

Because this outcome is required to be enforced due to language in lease, the physician group is out $100,000.

2. The Holdover Gap:

The hospital owns a medical office building on campus and has a 4 year term with a podiatrist group that is now expired. Currently, the lease is 3 months past its original term limit and the group continues to make payments equal to prior months during the lease term.

Lease states holdover rent should be 150% until the tenant surrender premises or sign a new lease.

The tenant is obligated to pay additional 50% for 10,000 square feet over three months and sign a lease that commences in the future.

We will continue to add these in an effort to improve the real estate relationship between hospital and physician. So, stay in touch!

Remember, according to Stark Law the lease must comply with the following:

Written Agreement, signed by the parties and specifies the premises;
Term of at least one year;
Space is for business purpose and may include pro-rata common area expenses;
Rent is set in advance and consistent with fair market value;
Rent is not shaped in a manner that takes into account the volume or value of referrals;
Agreement is commercially reasonable;
Holdover is month-to-month for up to 180 days following an agreement that is over one year.

Why You Should Require a Real Estate Specialist…

Posted on October 18, 2011 by MREA

…Whether Retail (2 Main Types), Self Storage, Multi-Family, Industrial (2 Main Types), Office (2 or 3 Main Types, one of which includes Healthcare)?

Why?

Information (aka abstracts, circumstances, compilations, conclusions, details, documentation, dossier, evidence, facts, figures, input, knowledge, material, measurements, notes, proof, reporting, results, scoop, score, testimony, the whole story)!

Why is information so important? Technology experts and bloggers have made it practically free via the internet. Not the case for commercial real estate. Below are the fundamental reasons why enlisting a specialist with expert information regarding your product type is absolutely necessary.

Upon effective transaction:

Brokers and developers are not required to provide data for leases or sales to governing sources (so, why should they?);
Corporate, owner, user and investment companies are not required to provide exact data for the brokered leases or sales (why should they?);
Lenders, mortgage companies and appraisal firms are not required to provide thoroughly investigated data that is verified by all sources (why should they?);
States are not required to provide exact data for leases or sales back to the public (why should they?);
Even the exclusive commercial real estate information providers are not required to publish data that is entirely accurate, how could they (See 1 through 4)?

And on and on (CMBS, Wall Street, International Investment,etc.).

But, before you find yourself disgusted with the lack of reliable measures to ensure proper data is reported and recorded so that bubbles aren’t blown to exponentially larger sizes, consider the fact that everything was going up. Needless to say, when everything is going up, where is the need for investigative oversight? Simply put — Everyone is happy!

Which leads me back to the origin of this article to which I speak with valuable insight that the public needs to be aware. All general commercial real estate practitioners, and the firms that they operate within, are facing dire straits simply because of their lack of quality data and/or control of a sector type which is essential to influencing a buyer and seller in today’s marketplace.

And, because transaction volumes remain low and overhead for commercial real estate firms is peaking, this vital component to facilitating transactions is being cut to reduce company overhead. The most poignant phrase I have heard regarding this strategy is from a fellow mentoring subject who said that, “they are cutting off their nose to spite their face”.

Speaking from keen insight and background, general commercial real estate firms have been hemorrhaging every day over the latter part of the last decade. This, while specialist organizations have continued to gain market share due to their unrelinquishing control of the items that are absolutely essential to transaction confidence (buyers/landlords, sellers/tenants and information).

This article was written by Robert S. “Bob” Lowery, Managing Partner of MREA, a healthcare real estate firm headquartered in Houston, TX.

Comprehension of a Medical Lease Contract

Posted on October 13, 2011 by MREA

Statement: After auditing countless medical leases through our firm, its CPA and attorney partners, we want to make fully aware the consequences of any real estate agreement that is executed (signed).

On behalf of the associates of this firm, the declaration above is about as harsh and opinionated that we, as advisors, can be without crossing the line whereby disassociating ourselves in our mission to coordinate the healthcare real estate markets; physician, hospital, investor, owners.

But, speaking from the perspective of a landlord (lessor), the largest impediment that a landlord sees is the lack of commitment and foresight from the lessee’s principal founders with regards to their own organization’s goals and objectives. The landlord has to take into account that the necessary financial due diligence has been performed and the organization is prepared for the legal ramifications if ANY PART of the contract is broken. Thus, it is essential when provided any document that requires signature that it is taken to someone else for further review. Take it to your spouse, your associates, your financial partners, your attorney, your accountant, your shareholders. If your firm is fortunate enough to have real estate representation that will not charge you an arm or leg, take it to your broker.

Typically, the mistakes that we see from physicians (especially independents) is that of discounting the lease instrument and the level of sophistication and comprehension necessary to interpret this contractually-binding obligation effectively. As an example, if there are 10 items that are conveniently written to control one party of a transaction, does the other party know all 10, or just 5, or 2? Remember, it is already popular culture that a physician is not a savvy businessperson, which does not speak of their collaborative efforts. All kidding aside, it is of paramount importance to fully comprehending any contract or, at the least, obtain verbal or written interpretation through fiduciary relationships.

Now, for the really bad news.

The field of experts that truly understand medical contracts and can convey its purpose, as well as its fine print requirements to your organization, are few. Because most healthcare real estate real estate experts understand this, they will typically work for a 5 to 10 percentage premium over the traditional brokerage firm’s marketed commission or consulting fee. You may be fortunate to locate a highly skilled healthcare unit, but beware the temptation to accept their services for both sides of any transaction for reasons that I do not need to explain further.

To summarize, our readers should be acutely aware of the needs of their organization first, prior to contracting with any commercial or medical real estate agreement. They should also make sure they have brokerage or counsel that can perform the necessary tasks associated with YOUR transaction, which should be compensated by their firm. Until then, we can keep combing over the mistakes, some of which will cost our clients bankruptcy, until lessens are learned.

This article was written by Robert S. “Bob” Lowery, Managing Partner with MREA | Medical Real Estate Advisors.

MREA Sets Sights on Houston’s Medical Real Estate Market

Posted on October 7, 2011 by MREA

Houston, TX (WiredPRNews.com) — MREA | Medical Real Estate Advisors (www.MREAusa.com) has announced the launch of MREA – a healthcare real estate advisory focused on leasing, management, acquisition, disposition and development. MREA is a strategic initiative within the medical arena and will consist of a team of healthcare facility managers and commercial real estate professionals exclusively dedicated to representing customers and clients for their medical real estate needs.

MREA will offer clients strategic guidance, powerful research and detailed consulting in determining real estate opportunities within the most profitable and populous medical locations in the Greater Houston area. As healthcare real estate service providers, MREA will represent their clients by facilitating the special requirements of each particular medical assignment with creativity, sincerity and professionalism.

MREA will offer the following real estate services:

Site Selection
Acquisition
Leasing
Brokerage
Development
Financing
Asset Management
Property Management
Consulting

MREA is currently the only healthcare real estate boutique firm in the Houston area that offers a full-service model to its clients. Robert S. “Bob” Lowery, Managing Partner, assisted in formation of the firm and currently maintains over 5,000 physician, investor and hospital connections. Also, with Mr. Lowery’s leadership that spans two decades in the Houston community and years of experience assisting a broad range of investment capital seeking both commercial and healthcare real estate properties throughout Texas, MREA is a highly-connected, high-powered member of healthcare investment and owner-occupied real estate.

“After performing a thorough historical analysis of healthcare real estate leases and sales, we determined that the medical community, from physicians to investment, was not represented in a way that promotes the competitive spirit which is evident in other commercial real estate asset classes. Because the majority of the growth in the sector’s balance sheets and real estate occurred during the last decade, we think Greater Houston’s supply is ample to cover its demand. Thus, there is little concern for rental rate growth in the near term,” says Robert Lowery.

“A sure-fire way for owners to protect their healthcare real estate assets is through the services of a specialized firm that can facilitate the needs of both the medical sector and its real estate, not necessarily one of the other. Our grassroots efforts to obtain and secure relationships with physician groups and medical organizations along with our comprehension of the intricacies of the asset will allow MREA to grow rapidly as stability within the overall commercial real estate sector is found,” adds Mr. Lowery.

MREA is a full-service capable, medical focused real estate company that works with healthcare providers to augment existing business plans and strategies for growth, stability or consolidation of their real estate portfolio. The firm will provide comprehensive real estate solutions.

MREA | Medical Real Estate Advisors

Precision Guidance for Healthcare Real Estate

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