Precision Guidance in Healthcare Real Estate
Reply
Tag Archives: attorney
Why Our Clients Are Saying “No” To Hospital Systems
Several years ago, a partner and I undertook a major leap of faith to become exclusively intertwined with the medical industry. With over 40 years of combined commercial real estate experience, looking back, we took some bold steps to immerse ourselves into this growing healthcare provider network.
In the beginning, we were witnessing tremendous demand from every medical network to expand ancillary service types and locales, and imaginations were certainly running wild. We became instant beneficiaries of this growth spurt and soaked up transactional experience and a command of the tenant mix and business components that were successful for a given medical office building or hospital system.
In just a few years, with changes occurring so rapidly, so dramatically, it is now difficult to talk ‘expansion’ with using the term ‘consolidation’ in the same sentence. This is not to say that medical groups are not expanding, it continues. As to where, you would not be surprised.
But this time, several hospital systems have been kind enough to request our perspective on the physician marketplace and their specific growth opportunities. Ultimately, these calls begin, and circle back to, our long standing commitment to physician groups, whereby equipping them with best potential business and real estate options in the marketplace.
But, recent dialogue suggests that hospitals are having a difficult time inducing established physician groups to become part of their system. There are several reasons, most of which revolve around healthcare reform as a general theme, but others tend to be more specific to the physicians’ professional future and their general discontent of employment.
Thus, we want to highlight the reasons some physician groups are saying “no” to hospital employment.
1. Some hospitals are at significant risk of hiring too many doctors. With too many doctors come too many competitive pressures for doctors to perform comfortably.
a. Doctors will need to prove their worth during the contract, especially if new groups are absorbed. The thought alone may jeopardize physician commitment.
b. Hospitals may struggle with financial issues relative to their business plans in the mid-2000’s, or with future obligations of regulatory nature.
c. Contracts may include, sometimes discreetly, clauses that pertain to early termination.
d. Sometimes Hospitals go through mergers or acquisitions of another that has the ability to affect physician relations with one or all.
2. The intricacies of how employees should be compensated by hospital systems creates an unfair advantage from one to another.
a. Hospitals have the advantage when implementing metrics to determine the highest profitability within practice endeavors.
b. RVU methods can be abruptly changed when given the uncertainty of less or greater government support.
c. Patient increases have the ability to overwhelm certain pratice areas, such as family practice, without compensation measures that adequately provide for such increases.
3. Seniority is perceived not to be an attribute within the hospital system.
a. Hospitalists have assisted in call duty challenges, but more often than not, the younger physician population is not enthusiastic about taking a tremendous call load and are voicing their concerns.
b. Hospital systems may not provide adequate measures to control call duty and patient volume, where private practices may employ these actions.
4. Physicians are accustomed to being in control of outcomes under their supervision.
a. Physician groups are quickly implemented into system and can become disenchanted in how their doctors, or staff, are being utilized.
b. Ancillary services may be a large component of a practice’s income, in which most are absorbed or non-negotiable when entering into a hospital contract.
c. With the advent of electronic health records, comes the hospital systems consumption of physician data into the coffers of a strategic, web-based marketing and patient assimilation network.
5. Non-compete clauses could take the most highly informed physician groups by surprise, especially if contracts are for a limited period of time.
a. A Hospital system made have affiliates, or may merge or acquire another hospital or network of physicians which effectively places additional limits on where a physician, or practice, may perform.
b. Upon the conclusion of a contract or severe downturn in economy, non-compete clauses can interfere with a physician, or practice group, whereas services are no longer needed and physicians may not partner or practice where they choose.
These are just a few of basic issues that come to our attention regularly within physician discussions of Hospital employment. Hospital systems have been fairly reactive and are tailoring their contracts to remedy such objections, but a certain stigma permeates throughout the physician public which has kept most conversations mute or placed to sidelines…for now.
Hospitals Employing Physicians: Is It Different This Time?
Around 15 years ago, physician practices were purchased by hospitals at compellingly high prices. Unfortunately for these hospital systems, within a matter of just a few years, the physicians were re-injected back into the community, largely because the hospital systems had not realized a return on investment. Fast forward to 2012, we hear similar stories about physicians becoming incorporated into a hospital’s network.‘
The reasons for hospital systems obtaining physician groups may be many. But, most conversations boil down to either a specialty or geographic play, whereby hospitals seek entrance or command of certain designated fields or locales. Also, with the establishment of healthcare reform, and impetus from both hospital and physicians for greater reimbursements, as well as a movement to adopt a more streamlined, technologically advanced care distribution model — we think this time may be different.
‘
Based on casual conversations, the motivations to join a hospital from a physician perspective is appearing much greater today than it was in the mid-90′s. A weakened economy, high employment or practice costs, entry barriers, a more savvy-consumer, and the potential for declining reimbursements, are among the top justifications that we hear from physician groups.
‘
There seems to be a greater number of differences in how the hospital systems are purchasing medical practices today, though, when compared to that of years past. Mainly, hospital systems are not offering to pay exorbitant prices, likely as a result of previous miscalculations. As for those that we speak with, many are not seeking to purchase practices outright (staff, equipment, management, real estate, in some cases). Instead, the hospital is offering employment compensation, with greater emphasis on incentives for productivity, to a select group of physicians for a number of years. Also, because reform will include greater regulatory oversight of physician purchases, this may be an incentive for hospitals to complete acquisitions prior to 2014, when the majority of reform’s initiatives take effect.
‘
The most common way that a physician practice group is absorbed by a hospital is through a method where physician owners and practice administrators keep an ongoing operation in place, essentially subjecting to less guidelines and oversight, but to assume some naming rights, some jurisdiction, as well as partnership for likely for potential future transaction.
As for the outright sale of a practice to a hospital, it may be achieved in several different ways. A hospital may purchase a practice’s tangible assets with physicians and staff as employees of the practice, whereby the unit is obtained as a separate entity. In another instance, the hospital may acquire the assets, physicians and staff to become employees of the hospital, in which the practice discontinues. As for unique circumstances, the staff becomes employees of the hospital, but the physicians remain separate.
A certain consideration should be made by physician groups as to the value of their practice to the hospital system. Because anti-kickback laws exist, the hospital cannot pay a physician group more than ‘fair value’ for their practice. Any payment that is beyond a certain amount could be considered a ‘kickback’ for services provided to the hospital. Also, keep in mind, the revenue generated by physicians for referrals outside of the practice itself are not considered in the valuation.
Another issue that comes from a practice purchase is that physicians are not relieved of their responsibilities. This is because the acquisition is commonly considered a separate operating division or profit center of the hospital. Consequently, the physicians compensation is still tied to the profitability of their previous medical practice. This provides troublesome if physicians are nearing retirement.
One last reminder, and a stark reminder of how this time may be different, is how the practice’s patients now can easily become part of hospital’s affiliated practice, especially with the advent of electronic medical records. In essence, the hospital now owns and operates all patient lists and records that have been accumulated by the practice group.
While I will leave you with the determination of whether it is better to sell, partner or lease with a hospital, MREA has established healthcare real estate professionals, accountants and attorneys to whom you have access. Contact us for our wide range of client responsibilities that incorporate business strategies with extensive real estate capabilities.
Cleaning House: HIPAA & Medical Records
‘Cleaning House’ is a simple, figurative analogy as to what is currently taking place in the health care industry.
Now that reform has been responsible for identifying and correcting some of the system’s major abusers of taxpayer dollars, the latest news is with regards to the significant security breaches of medical records that have the potential to have much greater ramifications to the local, state and even our country. Most of the breaches have been concentrated within the medical industry, but keep in mind that this is now one of the most scrutinized sectors of our economy.
We wanted to touch upon a few ideas when selecting where files are headed to secure that the information does not come back to haunt you.
The truth is that in each business, large and small, several employees have the ability to access personal financial or medical records that cover a huge spectrum of our population. Many companies opt not to deal with this appropriately, compiling the information and throwing it in the nearest waste receptacle. Also, many organizations to not adhere to standards to store or destruct legal documentation, which makes it even easier to attract the wrong group of conspirers or thieves.
In the health care industry, the potential ramifications, are, and will be, even greater. Not properly storing proprietary information, or discarding it without destroying it, is exposing the organization to a risk of litigation and a potential loss of business. HIPAA law requires medical organizations to maintain a reasonable and appropriate amount of technical and personal safeguards to prevent an unauthorized breach of critical information. The fines are still regarded as a ‘slap on the wrist’ by many physicians, but the way that a ‘contagion of transparency’ is now firmly planted and spreading rapidly, complying to any HIPAA regulation is in your best interests.
For unintentional violation of the HIPAA regulations, the Department of Health & Human Services can levy:
A fine of $100 per violation and a maximum of $25,000 per year. And, trust me when I tell you that, the buzz circulating within our network of attorneys suggests that is it is becoming increasingly more difficult to challenge these rulings.
For intentional violations of the HIPAA regulations, the Department of Justice may levy:
- A fine up to $50,000 and 1 year of prison for knowingly obtaining or disclosing PHI
- A fine up to $10,000 and 5 years if done under false pretenses
- A fine up to $250,000 and 10 years if intent to sell, transfer, or use for commercial advantage, personal gain, or malicious harm
Penalties may apply to the individual violator but they may also apply to the organization or even to its officers.
As for proper measures of disposing physical or technical medical records when involving real estate decisions, please contact our office.
For the complete HIPAA regulations, visit the Department of Health and Human Services.
To learn more about HIPAA insurance reform or HIPAA administrative simplification, visit Center for Medicare & Medicaid Services (CMS).
Healthcare Bankruptcy & Receivership – Real Estate Services
MREA is dedicated to improving the health and wealth of ita clients through several varying healthcare real estate competencies, many of which are located on our website. Our specialization within this narrow, niche sector provides our physicians, investors, owners and medical center customers with direct exposure to healthcare real estate opportunities. Currently, our firm is fielding a greater number of inquiries for the assistance of distressed real estate property offerings. So, we offer a quick post of our services.
As most are aware, an unfortunate reality exists in today’s real estate marketplace. The financial system is working on ways to deal with those that relied too heavily on leverage and debt instruments to fund real estate purchases during the middle to latter years of last decade. This reality haunts the medical real estate industry that, just 5 to 7 years ago, expanded greatly to accommodate forecasting models that placed significant emphasis on serving a growing, health-conscious population, especially that of the baby boomers.
As the commercial and healthcare real estate industries are in the initial stages of coping with an abundance of over-leveraged property, our firm is well positioned to capture a lion’s share of these opportunities. It is because our firm has developed “across-the-board” relationships within the healthcare real estate sector whereby delivering property offerings (lease, sale, redevelopment) directly to the doorstep of an actively managed database of medical tenants, investors and hospital owners.
MREA Distressed
The Medical Real Estate Advisors (MREA) have the expertise required to effectively manage a variety of distressed situations involving non-performing loans, as well as the management, leasing, disposition and redevelopment of Real Estate Owned (REO) property. Our professionals are actively involved in loan workouts, mortgage possessions and foreclosures and we seek avenues to eliminate overexposure by directing any offerings to a secure database of medical professionals and investors. Along with traditional distressed real estate services, our specialized competencies include judicial and non-judicial foreclosures, court-appointed receiverships, bankruptcies and deed-in-lieus.
Receivership Services
Mr. Robert S. “Bob” Lowery and his team of associates are versed in court proceedings that involve the foreclosure and appointment of a receiver. Our comprehensive real estate solutions for the medical industry play a vital role in the efficient transition of the asset from its current position to that of significant value to the marketplace. Services include:
Strategic Planning – Stabilization of Property — Tenant Retention — Property Management — Marketing & Advertising — Leasing — Exit Strategies
Bankruptcy Services
To complement an expansive list of healthcare real estate services, MREA is involved in working with bankruptcy trustees to assist with businesses that are financially troubled, either directly or indirectly, from their real estate holdings. Our services:
Assisting Turnaround Management Companies — Monetizing Assets — Advising Lender Workouts — Creditor Assignments — Representing Buyers & Sellers — Real Estate & Recapitalizations – Equipment, Furniture, Business Item Liquidations
Robert S. “Bob” Lowery is Managing Partner of MREA | Medical Real Estate Advisors
A Dirty Issue: The Handling of Medical Waste
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
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.
Comprehension of a Medical Lease Contract
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.
10 iPad Apps for Commercial Real Estate Brokers
Dropbox – Free service that lets you bring your photos, docs, and videos anywhere and share them easily. Never email yourself a file again!
Loopnet – Access the largest commercial real estate listing service online. Search commercial properties for sale or lease, obtain commercial loans from the industry leader.
CostarGo – Buildings for sale, sales comps, spaces available, floor plans recent lease deals, agents, landlords, principals and prospects, detailed tenant information, including lease expirations, stacking plans and contact information.
Dragon – An easy-to-use voice recognition application powered by Dragon® NaturallySpeaking® that allows you to easily speak and instantly see your text or email messages. In fact, it’s up to five (5) times faster than typing on the keyboard.AutoCAD WS
AutoCAD WS – Cloud-based CAD editor from Autodesk.
ESRI – With the free BAO for iOS app, you can access key demographic and market facts about any location in the U.S.
Sign-n-Send – Signing documents has never been easier! Sign any PDF and Microsoft Office document straight from your iPad and send it via e-mail!
Photoshop Express – Enjoy having your photo and video library right in your hands — without wasting your device’s valuable storage space. Photoshop Express is a companion to Photoshop.com, your online photo sharing, editing, and hosting resource.
Pro HDR – Automatically create stunning full-resolution HDR images with just a single tap!
ScanBizCards – Best business card scanning software app. Although not designed for the iPad, brokers may scan and send your business cards and update your contact management software to utilize on the iPad.
Coming Soon – 10 more apps for the intermediate – advanced users! – Robert S. “Bob” Lowery
6 Sublease Tips For Existing Tenants
With an abundance of rent space about to wash ashore, it may be wise to address your excess space or locations, before the next wave of renewals and relocations batter the Houston commercial real estate market. Because this market currently favors landlords and tenants that control space within a well leased and managed or highly trafficked location, depending on the nature of the business, we suggest taking advantage of an engaged subleasing market to locate other potential users. When analyzing space to sublease, the following factors should be considered:
Space to Sublease
- How much space is to be sublet?
- What is the average transaction size in the market?
- How many competitive blocks of similarly sized space exist?
- What is the absorption of those sized units in the marketplace?
Once all of these questions have been asked and answered, the user will have a better understanding as to how long it should reasonably take to lease the space.
Configuration of Space
- How is the space configured?
- What is the utility of the layout?
- Is it primarily offices or substantially open space?
The configuration of the space will also determine how easy (or difficult) it will be to lease. For example, a medical office space consisting of nothing but private consulting offices will be extremely difficult to sublease, as most office space users seek a balance between private offices and public workspace. Accordingly, subleasing that type of space will take longer than space with a better balance of private offices and workstation areas.
Furniture, Fixtures, Equipment, Etc.
In certain circumstances, the configuration of the space may be enhanced by leaving the furniture and fixtures in place. In this manner, a prospective user will not have to incur the additional costs and longer lead times associated with obtaining new and/or used furniture for this requirement. Consequently, in subleasing space, consideration should be given – and value should be sought – for subleasing space complete with furniture for both private offices and workstation areas if that represents a competitive advantage.
Lease Term Length
There is a traditional “predisposition” to find a subtenant whose needs with regard to term coincide with the term of the prime lease. However, this is not always possible. Accordingly, in marketing the space, the minimum term acceptable should be understood and dealt with. In certain circumstances, a landlord may be prepared to offer a longer term to a creditworthy subtenant, thereby creating an opportunity for the current user to eliminate all liability. Term is a critical factor and always needs to be viewed.
Rent
Simply stated, sublet space should be priced to move. The longer it takes to sublease, the more expense incurred and the less the percentage of recovery. In most markets today, it is virtually impossible to make money on a sublease transaction. Accordingly, and to repeat a theme, the goal is to move the space to minimize loss, not maximize potential (and actually illusory) gain. To that end, a rental structure should be developed which provides the marketplace an incentive for taking the space.
Improvements
In the real world, sublet space does not usually offer 100% of what the new user requires. Accordingly, money is needed for recarpeting, repainting, some construction work, etc. Many firms subleasing space prefer to grant free rent as opposed to providing cash for improvements. Irrespective of the approach taken, one thing is certain – firms subleasing excess space need to be prepared to address the concept of providing monies for improvements to the space if they expect to successfully sublet the space.
