Tim Dougherty is a freelance writer based in Wading River, N.Y.
Profile: What's Up, Doc?
A healthy niche
April 1, 1996
Todd Payne, SIOR®, principal at Goodfellow--Ashmore Commercial Real Estate Services, Danbury, Conn., saw a golden opportunity in medicine.
Payne didn't change careers. Instead, he opened a medical-leasing division and believes it'll soon become a major part of his business.
Managed care is pressing the medical community to contain costs and raise profits, Payne explains. At least in Payne's area, that has forced doctors to merge practices and hospitals to open satellite offices in search of new patients. That translates into real estate needs.
Because of the specialized knowledge needed to serve doctors and hospitals, Payne didn't want just any salesperson to head the new division. In fact, he didn't choose a salesperson at all. Instead, he brought in Scott Cooney, a friend who had no real estate sales training but had spent more than a decade in the medical industry.
"Scott speaks the language," Payne says. "If you want to do business with doctors and hospitals, you need to know their needs and understand what affects their overhead and business plans."
Cooney began his career in the medical industry 12 years ago as a substance-abuse counselor. His proclivity for management led to a job as coordinator of facilities for a large corporation that operated a chain of clinics.
One of his roles was to develop the corporation's marketing strategies to increase its business with doctors, hospitals, health maintenance organizations (HMOs), and insurance companies---a useful training ground for his position with Goodfellow--Ashmore.
For Cooney, making the jump to real estate was easy. "I honestly knew very little about selling real estate," he says, "but since I knew how managed care had changed the medical industry and understood how medical facilities operated, it seemed like a natural fit."
In his previous profession, Cooney had learned how to deal with demanding doctors---no easy task. And he had the contacts, as well as an intimate grasp of the business side of medicine. "As a facilities coordinator, I saw buildings being retrofitted to meet medical needs, and I saw doctors forming strategic alliances to bring down costs," Cooney says.
'It's a War Out There'
His advice to brokers who want to break into the medical services niche: "Read the trade publications that doctors and hospital administrators read, especially those that deal with the business side. It's a war out there right now. The pressure to make money is very high. HMOs are paying less than traditional indemnity programs, and the cost of doing business is increasing."
Before cost containment became a major issue, doctors had the ability to increase their patients' fees "pretty much as they saw fit," Cooney says. That translated into relatively simple negotiations for leased space. Now, with doctors' fees being set by insurance companies, doctors need to bring their overhead down. "You now have doctors paying $25 a square foot," Cooney says, "and they're trying to get that down to $15 or less."
Since bringing Cooney aboard last October, Goodfellow--Ashmore has closed on three locations for small medical practices, Payne says. "We're at the contract stage on a number of larger transactions, and we just agreed with the owners of a life-care facility to put it on the market," he adds.
Any Size Market Will Do
Payne and Cooney have concentrated their efforts in the relatively affluent areas of Connecticut near New York City. But the pair are planning a move into New York City.
"I don't think you have to focus on high-population areas. Doctors and hospitals in less populated areas are feeling the same pinch as those in more populated areas," Payne ways. "I really believe this is a segment of the business that's about to explode."
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