May 14, 2024 • 36 mins
In this episode, we explore the critical elements of finding an ideal location for a veterinary practice. Joe Flick from Carr Commercial Realty lends his expertise to dissect the nuances of veterinary real estate, emphasizing the benefits of engaging a specialist. Joe provides valuable insights into the role of an advocate in high-stakes real estate transactions, empowering veterinarians with the essential knowledge to make well-informed decisions that shape the future of their practices.
We delve into the complexities of real estate tracking and how it can inadvertently lead to an overwhelming number of unsolicited calls—an inconvenience that can be mitigated with a professional like Joe guiding the process. The episode also addresses strategic considerations veterinarians must evaluate, including whether to lease or purchase properties, and the specific challenges posed by the Florida real estate market. We discuss the importance of assembling a competent professional team to navigate the intricacies of real estate planning and negotiation, ensuring peace of mind through significant financial and emotional investments.
As the discussion concludes, Joe shares his expertise on lease renewals—a critical aspect for any practice. He offers strategies to enhance negotiation leverage and provides invaluable advice on managing build-outs and negotiating lease terms, equipping listeners with essential tools for success. The key takeaways underscore the necessity of early preparation and expert guidance. Join us to gain further expert perspectives on managing veterinary practices and to outline the industry’s blueprint for success.
Guest Info
JOE FLICK
Agent - FL Orlando
407.223.4128
joe.flick@carr.us
LinkedIn - linkedin.com/in/joe-flick-3b50b7b4
CARR - Joe Flick
Host Information
Bill Butler – Contact Information
Direct – 952-208-7220
https://butlervetinsurance.com/
https://www.linkedin.com/in/billbutler-cic/
Schedule a Strategy Session with Bill – Strategy Session
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Bill Butler (00:01):
Welcome to the Veterinary Blueprint Podcast
brought to you by Butler VetInsurance.
Hosted by Bill Butler, theVeterinary Blueprint Podcast is
for veterinarians and practicemanagers who are looking to
learn about working on theirpractice instead of in their
practice.
Each episode we will bring yousuccessful, proven blueprints
from others, both inside andoutside the veterinary industry.
(00:21):
Welcome to today's episode.
Welcome to another episode ofthe Veterinary Blueprints
Podcast.
I am your host, Bill Butler,and, as always, we're bringing
the business and entrepreneurmindset to the veterinary
industry.
And I'm your host, Bill Butler.
As I mentioned, Our guest thisweek I had the pleasure of
(00:43):
meeting.
I was just down at VMX inFlorida and met so many great
people.
I just happened to be standingat a booth and this gentleman
walked up and we got connectedby the person I was speaking
with and we hit it off.
We had bumped into him a coupletimes during the show out on
the exhibit floor and heintroduced me to some people
(01:04):
show out on the exhibit floorand he introduced me to some
people.
It was a really good time andso I'm grateful to be able to
bring Joe Flick from CarrCommercial Realty and he has
informed me that Carr CommercialRealty is the largest tenant
buyer brokerage firm in theUnited States.
He represents Central Floridaand I'm happy to bring Joe Flick
onto the podcast today.
Joe Flick (01:24):
Hey, bill, pleasure to be here.
Thanks for having me.
Bill Butler (01:27):
So you and I just happen to bump into each other,
as often happens at these kindof shows, especially that show.
I mean, that's an amazing show.
I've never been to VMX.
How many times have you been toVMX?
Joe Flick (01:40):
That would be my fourth year running in some
capacity.
Yeah, absolutely Fourth yearrunning.
You're absolutely right.
Bill Butler (01:46):
So you've been attending as a commercial real
estate professional with Carrand so why don't you give us a
little background on yourselfand who Carr is and how they fit
into and specific thehealthcare space?
I think that's probably thequantifier for Carr right.
They're the largest tenantbuyer brokerage for healthcare.
So why don't you give a littlebackground on yourself and who
(02:08):
you are and what CAR is to theveterinary world?
Joe Flick (02:12):
Sure, yeah, that's kind of a mouthful, isn't it?
Bill Butler (02:17):
It is.
Joe Flick (02:17):
The largest tenant buyer, but it qualifies us.
So essentially what it means isthat we work specifically for
doctors in my case mostlyveterinarians and we work on
their behalf.
So we work one side of theequation.
I don't work for landlords, Idon't work for sellers, I only
(02:38):
work for people that areactively looking for real estate
in some capacity and, like Isaid, we further kind of, I
guess, focus in, hone in on thehealthcare field and then
specifically with veterinarians.
So it really it specializes us.
It doesn't pigeonhole us per se, but we can really pardon the
(02:58):
pun.
We can really vet propertiesand get the correct ones in
front of our potential tenantsand buyers so that they don't
waste times on properties thatjust don't make sense for them.
Bill Butler (03:30):
And I got to tell you, just trying to find
commercial office space eventhough there's a ton out there
right now because of the currentmarket here in 24, it is a
royal pain in the butt.
Not all the locations arelisted and all the rates are
negotiable.
And just out trying to look onLoopNet or whatever your local
area has LoopNet's national, butCBRE and all these, they don't
list everything and they don'tshow where everything is.
(03:50):
And you know, I just want toknow what the dang rent is per
square foot.
And do you have the 1,500 to1,700 square feet I need for my
insurance operation and I haveto imagine, when you're working
with your clients, that you runinto the same thing and so you
know.
If you're a veterinarianlooking to open a practice or
(04:11):
expand to a new location or buysomething, why should they hire
a commercial real estate agent,specifically one who, as you
said, knows the industry?
Joe Flick (04:22):
That's a great question, bill, and I mean you
hit the nail on the head with.
When it comes to that, itdoesn't matter if you're a
veterinarian or a small businessowner, whether you have one
location or seven locations.
At the end of the day, you're asmall business owner.
You know what you're doing.
You're either taking care ofyour business, taking care of
(04:42):
patients that's what you'vetrained to do, that's what you
love to do.
Doing something like thistrying to find a space to lease,
trying to renew your currentlease, which we'll get down the
road and we'll talk about alittle bit down the road that's
all after hours things.
You don't have time for that,and on top of it, you're not an
expert in that area, so youdon't know what the market can
(05:04):
bear.
Like you said, all of a lot ofthose um.
Those properties aren't goingto have the base rent listed.
Bill Butler (05:13):
What type of um, what type of term negotiable and
the rate and the square footnegotiables, like what the heck
does that mean?
Joe Flick (05:23):
And if we?
Bill Butler (05:23):
build it out, and if we build it out, we're going
to throw in an extra five bucksa square foot, or you can build
it out, or you know.
There's just so many differentthings specializing with
veterinarians and then figuringout that you like working with
them.
And then how do you help yourclients, whether they're looking
(05:50):
to buy or lease a space.
Joe Flick (05:53):
Great question.
So I mean I'll give you theshort story on that.
My path was a little odd, butnot quite as crazy as some of
the ones I've heard.
Coming to Carr.
I was in the restaurantindustry for a long time.
I worked nights and it wasn'treally conducive to family life.
And one of our agents at thetime he lived in the
(06:15):
neighborhood.
We had kids the same age thatwere playing together and we
kind of just all gravitatedtowards each other and he told
me what he did and he told methey were opening a commercial.
So Carr is healthcare tenantsand buyers and at the time we
had a strictly commercialversion of what we do as well
(06:36):
Same process, same methods.
But anybody let's say we had adoctor that had a cousin that
owned a nail salon and they hada lease renewal or they were
looking for a second location.
Yes, we could do that, butthat's not what we're best at,
that's not what we're known for.
And so we opened a division thatwould focus on helping those
(06:56):
tenants and buyers, thoseclients out, and that's what I
was brought on to do.
With my restaurant background,I worked with a lot of, you know
, of course restaurants, karate,dojos, nail salons, small
business owners your generalstrip mall.
Yeah, yeah, general strip mall.
Bill Butler (07:12):
Tenants right.
Joe Flick (07:14):
Yep tenants, people that we're buying to, and you
know, while it was good, I think, covid, that was 2019.
And in the beginning of 2020,of course, covid hit and we
really started to refocus andthink about.
You know what it is that wewere good at and that's helping
people.
That help people healthcareprofessionals doctors.
(07:36):
And so we kind of reorchestrateda little bit and that brought
about my position beingliquidated in the commercial
industry and I went straight toanother buddy of mine, a partner
at the time.
He was working withoptometrists, ophthalmologists,
(07:57):
chiropractors and veterinariansand I jumped into his pipeline.
It was a match really thatworked out well for us.
He needed someone.
He was overextended, didn'thave time for his family.
And I was already there.
He didn't have to hire me andtrain me.
I already knew how car workedand what happened, so I kind of
(08:17):
just stepped into his pipelineand hit the ground running there
.
And veterinarians were, andprobably are still, about 60% of
my portfolio and who I reallyfocus the most bandwidth on
working with, simply becausethey're A they're fun to work
with.
Yeah, they're great.
They're great people to workwith.
Bill Butler (08:37):
Yeah.
Joe Flick (08:38):
Yeah.
Bill Butler (08:39):
And that's why you know we've enjoyed doing it as
well.
So you know kind of.
Back to that first question whyhire a commercial real estate
agent?
I'm not a real estate agent.
I'm not a realtor Trying tofigure out lease negotiations,
what's available.
All the building managers don'tlist rates.
What's funny is I've reachedout in my own search for my own
(09:01):
office space.
You reach out and go oh yeah,we don't list everything online.
You're like well, how the heckare you going to?
You know who who knows what'savailable.
Joe Flick (09:09):
Yeah, they don't want you, they don't want people to
kind of fish for pricing.
So you know they don't want youto be able to compare one one
building to another, and theyalso they use it, I guess, as
bait for people that aren'texperienced in the real estate
industry to call out If you'regoing in on your behalf.
The landlord or the listingagent is doing a cartwheel in
(09:30):
the background because they knowthat you're not trained in this
industry.
You don't have any marketknowledge.
And more than likely.
You're going to pay more thanmarket rent.
Yeah, whatever, and you're notgoing to get the concessions
that maybe you should be gettingin that market.
Bill Butler (09:46):
Here's what's crazy .
Here's what's crazy, joe, isthat I mean for everyone out
there when you start clicking onreal estate listings for
whether it's buy or lease, theyhave so much tracking stuff out
there that I would like I justgo to their website and they
start calling my office and.
I'm like how the heck did theyget all my contact info off of
(10:09):
me Just looking at a listing onloop net and you know Joe's
laughing at this.
But like seriously I was, Iwould get three to four calls a
week just just shopping onlineand it's like the ad shopping
for insurance.
Exactly, and so, like I said,shopping for insurance, we're
hot on your tail.
And so I think you know onething that you could do as the
(10:29):
commercial real estateprofessionals act as that buffer
where I'm not getting hit up byevery property manager that I
looked at, right.
Joe Flick (10:37):
Yeah, no, yeah, buffer is a great way, that's
actually a good way of puttingit, because they were helping
you.
It's always going to be anemotional process because it's a
very you know, it's afinancially burdensome process
to you.
In some capacity You're going,you're putting a huge, taking
out a large loan.
Bill Butler (10:55):
Yeah, you're putting a huge investment,
personally and and monetarily,into this thing and you want to
like.
That's your baby, that's whereyou're going to spend more time
than you.
Joe Flick (11:28):
Sure, no, you're absolutely right.
So being able to be in thatposition where we can filter the
information that we're gettingfrom the landlord or the seller,
because we know how sound bitesof what you need at the end of
a long day or during you knowwhen you get, when you step out
of an exam room for a couple ofminutes after seeing a patient,
to really see the bullet pointsof, hey, this is where we're at,
this is where I think we needto be, this is how we push back
(11:50):
and you know this, that oranother way.
And I'm really simplifying it.
But that's essentially whatwe're there for to be your
advocate.
And from that perspective toobecause we only represent
tenants and buyers, we don'trepresent landlords and sellers
we can enter into a fiduciaryagreement with our clients.
(12:14):
We're actively and legallyworking actually on your best
behalf, because there's noconflict of interest.
We don't list properties on theother side.
We don't have a tenant lookingfor a couple of spaces that
we're steering Steering's a badword in our industry.
Bill Butler (12:29):
That actually happened to me because I was
going to look at one propertyand they said, well, we have
this other property, we'll meetyou there, we can look at that.
And I'm like I don't want tolook at that building.
It's attached to a vacant thanthe one that I'm trying to lease
out to you.
And I was just like I mean, Iknew it was happening, but you
(12:59):
never think about veterinarians.
They just don't have time toscrew around with that.
So you know, if you're aveterinarian and you're thinking
, I want, I need either need anew space, I need to expand or
I'm going to start a practice,you know from your perspective
of what you do and you're basedin central Florida, just to put
that out there.
So you didn't have to go far tohit VMX, but you're in central
(13:22):
Florida, it was right in yourbackyard, right in my backyard.
We escaped the cold weather tocome down there.
Should they lease, you know,from your perspective, should
they lease or buy?
Joe Flick (13:34):
That's a good question and I really the answer
is it depends.
And the process is that initialphone call conversation that we
have is really about a gettingto know each other, establishing
a rapport, establishing trust,but also talking about what your
visions and goals are.
You know what stage of yourpractice life are you in?
(13:55):
What's the end game here?
Have you talked to yourfinancial advisor?
Do you have a CPA that you use?
Bill Butler (14:03):
Yeah.
So getting your professionalteam together, so a real estate
agent, lender, cpa, attorney,insurance, those are kind of the
five biggies that you really.
If you're thinking about eitherleasing, buying, because if you
lease you still might need abuild-out loan.
So you got to get the lenderinvolved and at some point
you're going to have to put adownstroke down.
(14:24):
That's where the financialadvisor comes into play to say
can you afford to suck in yourcheeks?
A little bit to jump in right.
Joe Flick (14:32):
Well said and it's yes.
And if you can purchase, great,but I guess what?
Or if you want to purchase, Ishould say then great, but we
just need to know what kind ofsandbox we're playing in and
what can the market bear?
So you might say, hey Joe, I'vegot $4 million just sitting in
my bank account, let's go totown.
I'm like, well, the areas thatyou're looking in there's next
(14:55):
to nothing and most of thetransactions are happening off
market because people are goingover each other to try to buy
this property when it becomesavailable and there are several
markets like that down here too.
So it's just kind of a it'ssetting the expectation level
Like, yeah, well, you want to bethere.
Well, so do seven other peoplethat I know, and probably 10
(15:18):
times that out there in the openmarket as well.
So letting them know what it is, what kind of financial buying
power they have if they'relooking to purchase, or also
looking breaking down and wehave the ability to do that with
some spreadsheets that we havebreaking down what it's going to
look like.
So, okay, hey, buying in thisarea, it's about $300 to $400 a
square foot.
Let's say they want what is a2,000 square foot building.
(15:40):
So we need to make sure thatwe're factoring in everything
that we need, includinginsurance, to see what that
bottom number monthly basis is.
Bill Butler (15:48):
And Florida's a whole different situation when
it comes to insurance.
We were chatting at VMX about,you know, insurance, and he said
, oh well, I don't have to worrytoo much about the coastal
stuff.
I don't deal with Fort Myers,or, you know, I've got some some
counterparts that I send stuffto, uh, central Florida, it's
not as bad.
Um, you know, we have our ownissues up here in the Midwest
(16:08):
right now with insurance, and soyou know, I think, like you
were saying, having a reallygood game plan and understanding
about, well, this is what Iwant to try and do.
How do all the pieces of thepuzzle fit into play?
I was actually on the phonewith a veterinarian this morning
from Miami and their loans heldup because the insurance they
(16:30):
thought they had they were notgoing to get now, and so you
know it's trying to put allthose pieces of the puzzle in
place.
You might have the perfect spot, but financing insurance, you
know it, it the next doorneighbor, the roof age isn't the
right, or or you know the the,the rehab costs might be too
much.
Um, now, you don't deal withvacant land buildups, do you?
Joe Flick (16:58):
Yeah, we can have, we can help with that Absolutely.
So that's, that's another partof the conversation that we have
at that.
Initial reach out is, you know,if there's nothing there, let's
go make that, let's find vacantland if it's available to.
Let's talk SBA loans versusconventional.
See what that looks like andthen you know really finding out
if we're talking purchase orbringing in the partners that we
need.
There are developers out thereall day that love veterinarians,
(17:19):
because I think we talked aboutthis too.
Their default rate is next tozero.
They're some of the lowest, ifnot the lowest, in the entire
commercial real estate sector interms of how little they are,
how sure of a thing they are.
So lenders love them and youknow there are plenty of
financial packages out therethat lenders can put together,
(17:43):
you know, of course, dependingon credit cashflow everything to
, to make that a possibility forthem, and that's just extending
the conversation as well, andwe're there to handhold them
throughout that whole process.
You know there are a lot ofperceived obstacles that come up
during the real estatetransaction process and we're
there to reassure them that youknow this isn't the first time
(18:04):
we've done it.
We're not reinventing the wheelon it.
We're going to show them, youknow, the best avenue to get the
deal done and to make sure, atthe end of the day, that they're
not getting taken advantage ofand that they have peace of mind
at the end of the night,knowing that they saw and
assessed all the options thatwere out there in the market and
that they made the bestdecision for themselves, their
family and their practice.
Bill Butler (18:25):
So you know where do you generally fit in the food
chain, so to speak.
So I'm insurance, I'm alwayslast.
Everybody calls me right beforeyou know they have to get the
documents into underwriting atthe, at the lender.
Do you generally get the callfirst, or does the bank get the
call first, or do they calltheir?
You know who.
You know where do you fit inthat that food chain or pipeline
(18:47):
, so to speak.
Joe Flick (18:49):
Oh, I'm usually near the front simply because they're
having an initial conversationwith you, know their family, and
then they're having it witheither a lender or they're
getting on, like you said,costar or LoopNet or one of
those platforms and just lookingto see what's out there and
after a while usually they cometo the same realization that you
(19:11):
did, bill, that you know I'moverwhelmed, I'm in over my head
here.
Bill Butler (19:14):
I don't want to do this anymore, but I need some
space.
So what the heck am I going todo now?
Joe Flick (19:18):
Exactly.
Well, what the heck am I goingto do now?
So they call a real estateprofessional that knows what
they're doing, hopefully, andthat works specifically with
vets, Similar to your world, youknow?
Could you work with, you know,just any agent out there?
Sure, but if you have theability to work with someone
that knows and understands theprocess specific to you, I mean
(19:42):
that's a game changer, Well, inyour industry right, because
building out an optometryfacility versus building out a
veterinary practice are twototally different situations.
Correct Same or differentsuppliers, different vendors,
different people that you needto surround yourself with to
make sure that you're making aninformed decision?
(20:02):
Yeah, you're absolutely rightthere.
Bill Butler (20:03):
Well, and I'm sure when you're out there looking
for your clients, you see youknow 4,000 square feet
differently for a veterinarianthan you do for the other parts
of your practice, where it's4,000 square feet for you know
optometrist or a podiatrist, oryou know somebody doing you know
a chiropractic clinic orsomething like that, where you
look at that kind of blankcanvas, where it's at if it's a
(20:25):
lease space or a purchase, andyou go, yeah, this is really
it's not going to work for aveterinarian, but it would work
great for this other industry.
Or, hey, optometrist guy, thisis really good for a veterinary
practice.
Let's, let's get one of her.
You know one of them in there.
Joe Flick (20:38):
So and sometimes you're right there, Bill.
We reverse engineer it.
I mean, we're like, hey, thisis a great spot.
There's nobody within a mile,mile and a half.
The demographics are great, thegrowth, the average household
income is up there.
What do I need to do to find aveterinarian that's looking?
Bill Butler (20:55):
to show them this location.
Joe Flick (20:57):
So you know I have no vested interest other than the
fact that there, you knowthere's a need.
I've established a hole in theindustry or in the local market
there where somebody could goand I'll reach out to you know a
local rep, somebody that workswith veterinarians all day and
just say, hey, do you haveanyone looking to expand into a
(21:18):
different location or anystartups coming down the line?
I've got a perfect place forthem.
So, yeah, so I mean that's,there are several different ways
to to get to the end game there.
Most of the time it's with aclient in hand at the very
beginning, but a lot of timesit's me finding the space before
I actually find the client.
And then going back to youroriginal point there about
(21:41):
looking at spaces and seeing ablank canvas, one of the first
things that you need to know,especially in the veterinary
world in the local market, iswhat the zoning ordinances are.
And they vary from county tocounty, municipality to
municipality, and it's key.
You don't want somebody that'scoming in and looking at it,
(22:02):
that's licensed in Florida butlooking at it from California,
looking at a Google map, findinga spot okay, great.
Bill Butler (22:06):
And then going down that path, jumping through all
those hoops, only to find outit's zoned industrial, not
commercial, and you're good luckgetting it rezoned or, you know
, you're jumping through amillion.
Joe Flick (22:18):
Yeah.
Bill Butler (22:19):
I've worked with a couple of businesses both inside
veterinary and outside, who,just you know, I was like, are
they find the perfect spot andthen they go.
Well, that was good for whatwas there, but you need X number
of parking spaces versus squarefootage because you're changing
the zoning and there isn'tenough.
And so, or there's one businesswas buying a building and the
(22:39):
bus stop was in front of theirspace and they needed pickup and
drop off and it just, you know,it was like 15 trips in front
of the city council to try andget the zoning change because
there was a bus stop there.
And you think how this sodifficult?
But the municipalities havetheir rules and if you're not
conforming to that, you mightfind the perfect spot, but again
, it just won't work out.
Joe Flick (23:00):
Yeah, and unfortunately we see that time
and time again.
We'll talk to doctors whobought land or bought a building
and then they have to turnaround and sell it or find a
different use for it simplybecause they didn't go through
the due diligence process, stepsnecessary to really um again
that the property correctlybefore um signing on the dotted
(23:22):
line.
And you know um, it's a, it's abig financial outlay from the
very beginning to do somethinglike that.
Oh, a huge time process too.
I mean not just the money butalso the time and scope and,
(23:54):
like you said, I think theirtime is just as important as the
money and a lot of times,usually those coincide, as we
like to say right.
Bill Butler (24:11):
So what's the most, so you know, between lease and
buy, what do you see from yourexperience and with your
counterparts at Carr being thelargest tenant, buyer, broker
for the health space, what's themost common real estate
transaction that you see?
Joe Flick (24:22):
The lease renewal really.
Bill Butler (24:24):
Really.
Joe Flick (24:25):
Which, yeah, lease renewals, and I'd say that's
probably of the transactions wehave within all the different
verticals that we do.
I'd say it's usually 40 to 50%of each agent's pipeline and
that might be more with us thanit is with other agencies out
there because we go after them.
First of all, you know it's nota transaction that you really
(24:48):
think of when you think ofcommercial real estate.
Bill Butler (24:50):
So I got my lease renewal offer from my landlord,
yeah, and it was franklydisappointing.
Just, I won't go into detailscause we're in the middle of my
lease negotiation or it's comingup, but let's just say um, um,
I was a little astonished, lessthan pleased.
It was hey, we're happy torenew you for five more years.
(25:12):
It's like I've been here for 10and I'm sure you want to renew
me for five.
So what are some pitfalls thatyou know?
Like that example right there.
I mean, you're just your kneejerk is well, I'm going to stay
here for five more years.
I mean, what, what is?
What do you do and what doescar do to help those tenant
renewals?
Joe Flick (25:33):
So the best thing that you can do from a tenant,
buyer, brokerage firm afterhiring one of us and game
planning is have an open mindabout what you're going to do
with your next step.
You can say, joe, I love mylandlord, I love where I'm at,
there's no way I'm moving and Isay that's great, mr Doctor.
(25:53):
But what we really need to dois we need to talk about posture
here, because the biggestthreat that you can make to any
landlord or get them to thetable because, at the end of the
day, they are seasoned realestate experts.
They know what they're doing.
They've likely been doing thisfor a long time.
They have an agent, maybethat's been doing this for a
long time.
(26:13):
They know how this dance works.
You do not.
So, going to the market showingyou what's out there and
actually touring locations andnegotiating on locations so that
you have a good perception notjust of the base rent maybe your
triple net expenses as well butalso of what kind of
concessions you can get fromother places out there your TI,
(26:36):
your tenant improvementallowance from a landlord to
physically build out a new spacefor them or for you.
Free rent, the amount of timefree rent, also on top of what
you would get to build out.
Bill Butler (26:48):
You're making me think about the people I've been
speaking with over the last twoweeks here about what I'm
potentially giving up, or like Ijust walk in and go oh, how
much is a square foot?
Oh, that sounds great, it looksawesome.
I'm just sign me up and free,rent, tenant, build out, uh,
finish.
I'm sure like the finishesyou're going to get, cause the
(27:09):
current spot we have, I'm justgoing to say 10 years ago we
didn't get what I would say issuper nice stuff.
So I don't even need to say,like, if I've got a year left on
my lease, like that's probablya good time to start thinking am
I going to stay here?
And if I'm going to go?
And if I'm going to stay here, Ishould go find a car, a real
(27:32):
estate professional somewhere inmy locality.
If you're in central Florida,call Joe Flick and say, hey, my
lease is up in a year.
What do you think we should do?
I'm going to get you on boardand figure out how to how to
maximize it.
I'm going to stay here, but howdo I, how do I get the best out
of, out of signing anotherfive-year or seven-year?
Because I mean, realistically,if you're a veterinary practice,
you're going to sign a five orseven like you're not going to
(27:53):
sign a two-year lease.
Joe Flick (27:55):
Yeah, you won't sign it, mostly because you're very
vested in that space.
You know your build-out is notcheap by any means.
Dentists and vets typicallyhave the most expensive
build-outs per square foot outof any of the healthcare
industries from what we see.
So I mean even with startupsthere.
(28:15):
You know the lenders are goingto require a 10 year note, so
they're going to want thethey're going to want the lease
to match.
Yeah, 10 year.
So they're going to want thatin some capacity, either a five
with a five-year option or a 10year.
But going back to our originalpoint there, and then we can
kind of touch that if we havetime.
But, yeah, the lease renewalprocess, there the bit, the best
(28:37):
thing we can do is go in therewith enough time, usually nine,
nine months to a year.
If you're considering looking,or we don't have any posture for
retail spaces for lease in thatarea, we'll make our own
posture.
We'll look at locations in youknow ground up locations.
Or we'll say Mr Landlord, hey,you know he likes where he's at,
(28:58):
but he needs more space, hisdream is to build.
You can't say that with twomonths left on your lease
they're like yeah, right Okay.
Yeah, okay, sure, float a brick.
We're going to, we're going togo.
You know you're not gettinganything out of us.
So what we need to do usually-.
Bill Butler (29:11):
The loan process by that point before you let alone
find a builder and land and thewhole deal.
Joe Flick (29:18):
Exactly exactly, and so you know.
Ideally nine months to a year,a year to 18 months.
If we're looking at ground upprojects, we're looking to at
least posture ground up projectsin the market there.
But the best thing we can do isreally go out, show them the
market, show what's there, andI'd say about 40% of the time we
(29:39):
have tenants that will end upmoving.
They didn't know, they weregung-ho about moving until we
actually got the process going,showed them other locations that
got excited, that got themexcited about it, introduced
them to different partners tohelp them move.
Maybe they have more frontage,more visibility, more parking.
They're accessing a differentpart of the market that they
(30:03):
didn't have before by simplymoving across to the other side
of the highway.
There are a lot of differentthings that come into play that
really help us build and nurturethat posture.
So when we go to the landlordand we initially start that
conversation, we have everythingelse already ironed out all
these other people looking totake us to the prom and all
(30:26):
these other sorry landlordslooking to take us to the prom.
We have all this firepower inour back pocket to then begin
the negotiation process, saying,hey, mr Landlord, he's willing
to stay, but we need to meet A,b, c and D, because the
properties down the street arewilling to do the same thing.
We're not asking for the moon,but we're asking for fair market
(30:46):
rent.
Sure, yeah, fair market rent.
A lot of times that there areescalations built into that year
.
Oh yeah, Into that rent on ayear-to-year basis.
Your lease probably has thattoo.
Yep Usually three, four,sometimes 5%, and after 10, 15
years of being in the same space, that usually outpaces the
market.
Bill Butler (31:04):
You've escalated past market rate.
Joe Flick (31:07):
Yeah.
So a simple reset saying, hey,let's get back down to market
rate, let's get you or let's getthem some free rent, let's get
some TI to it.
It doesn't have to be the exactsame as the spaces around, but
equitable to it.
So the TI maybe to refresh thespace, get some new flooring in,
maybe that's worn out.
(31:27):
You know all of that.
Bill Butler (31:29):
Are you describing my current situation?
Joe Flick (31:32):
Yeah, see, hey, hidden home there, bill.
But all of that, really itmoves the needle, because it's
typically one of the highestexpenses behind payroll for any
practitioners, especiallyveterinarians, is their real
estate costs.
Bill Butler (31:46):
Yeah.
Joe Flick (31:46):
So being able to reset that can cost you know it
can save them 10,000s of dollars, if not hundreds of thousands
over the course of a five or 10year renewal.
Bill Butler (31:55):
Yeah.
So moral of the story if you'regoing to buy a space, if you're
going to lease a space or ifyou're going to renew a space,
so it's pretty much coveringeverything you have from a
veterinarian perspective.
Unless you've bought your ownbuilding and you're you're,
you're just set.
But.
But if you're thinking aboutopening a practice or moving to
a new location or you're you'rea tenant and you've got a lease
(32:18):
renewal, what you're saying isfind a uh commercial real estate
professional specifically, joewould prefer a car uh
professional, but but there's,but there's plenty of
professionals out there but carknowing what they do, and so
you're Central Florida, but youknow CARS National as far as an
(32:38):
organization.
So if a veterinarian out therehears this podcast and they want
to reach out to Joe Flick atCAR, what's the best way to do
that?
I know you know you and I areon LinkedIn together.
We'll get that information outthere, but what's a good way for
for somebody to reach out toyou, joe?
Joe Flick (32:54):
You can reach me at by email or um at, uh joeflick
at carus, and that's C-A-R-Rus.
Bill Butler (33:04):
Two.
Joe Flick (33:04):
R's.
Yep, correct, yeah, two R'sthere, um, and then I can put
you, even if you're out ofmarket.
I can put you in touch with thelocal real estate agent that
best serves you.
Sometimes there are several, andit's nice to know which ones
have the most experience andwherewithal with veterinarians
there too, and I'm more thanhappy to put you in touch with
(33:25):
the local market expert that youhave there and you know whether
or not you use us or not.
Just make sure you're askingthe right questions, you know.
Make sure that they are tenantbuyer reps only typically, if
that's possible, that they'reonly working for you and not for
landlords, that they haveexperience in some capacity with
veterinarians and theintricacies and nuances of
(33:48):
working with those transactions.
And then also make sure thatthey are able to really hone in
and find spaces, be marketexperts.
Make sure they live, work andbreathe in your markets.
Drive them every day, otherwiseit's impossible to keep up with
expansion.
Also the hotspots you Also thehot spots.
(34:11):
What's new, what's dated, whatmarkets are dying and which ones
are coming up soon?
Bill Butler (34:17):
Yeah Well, you dropped a ton of gold nuggets
for our listeners.
Joe, it was a pleasure to haveyou on and it was awesome
meeting you down at VMX and lookforward to connecting you soon.
For those of you who arecatching this on a clip, I'm
wearing my Royal St Cloudpullover today, which is in
Joe's backyard down in St Cloud,Florida, in the Kissimmee area
(34:39):
and anyway, so it was greathaving you on Joe.
If Central Florida, make sureto hit Joe up, Otherwise we'll
have his contact information.
If you're looking for acommercial real estate
professional, you can find onethat specifically works in
animal health space through Joe,or just talk with one out there
and make sure you're beingrepresented by somebody who
understands the industry that weall work in.
(35:01):
So thanks so much for joiningus on this episode of the
Veterinary Blueprints Podcast.
Thanks for joining us, Joe.
Joe Flick (35:07):
Bill, it was a pleasure Appreciate you, sir.
Thanks for joining us.
Joe Bill, it was a pleasure.
Bill Butler (35:09):
Appreciate you, sir , and, as always, make sure to
like, click, review and sharethis with your friends.
It does help with all thealgorithms and we will catch you
on the next episode of theVeterinary Blueprints Podcast.
I'm your host, bill Butler.
Thanks for joining us, you.
Welcome to the Veterinary Blueprint Podcast
brought to you by Butler VetInsurance.
Hosted by Bill Butler, theVeterinary Blueprint Podcast is
for veterinarians and practicemanagers who are looking to
learn about working on theirpractice instead of in their
practice.
Each episode we will bring yousuccessful, proven blueprints
from others, both inside andoutside the veterinary industry.
(00:21):
Welcome to today's episode.
Welcome to another episode ofthe Veterinary Blueprints
Podcast.
I am your host, Bill Butler,and, as always, we're bringing
the business and entrepreneurmindset to the veterinary
industry.
And I'm your host, Bill Butler.
As I mentioned, Our guest thisweek I had the pleasure of
(00:43):
meeting.
I was just down at VMX inFlorida and met so many great
people.
I just happened to be standingat a booth and this gentleman
walked up and we got connectedby the person I was speaking
with and we hit it off.
We had bumped into him a coupletimes during the show out on
the exhibit floor and heintroduced me to some people
(01:04):
show out on the exhibit floorand he introduced me to some
people.
It was a really good time andso I'm grateful to be able to
bring Joe Flick from CarrCommercial Realty and he has
informed me that Carr CommercialRealty is the largest tenant
buyer brokerage firm in theUnited States.
He represents Central Floridaand I'm happy to bring Joe Flick
onto the podcast today.
Joe Flick (01:24):
Hey, bill, pleasure to be here.
Thanks for having me.
Bill Butler (01:27):
So you and I just happen to bump into each other,
as often happens at these kindof shows, especially that show.
I mean, that's an amazing show.
I've never been to VMX.
How many times have you been toVMX?
Joe Flick (01:40):
That would be my fourth year running in some
capacity.
Yeah, absolutely Fourth yearrunning.
You're absolutely right.
Bill Butler (01:46):
So you've been attending as a commercial real
estate professional with Carrand so why don't you give us a
little background on yourselfand who Carr is and how they fit
into and specific thehealthcare space?
I think that's probably thequantifier for Carr right.
They're the largest tenantbuyer brokerage for healthcare.
So why don't you give a littlebackground on yourself and who
(02:08):
you are and what CAR is to theveterinary world?
Joe Flick (02:12):
Sure, yeah, that's kind of a mouthful, isn't it?
Bill Butler (02:17):
It is.
Joe Flick (02:17):
The largest tenant buyer, but it qualifies us.
So essentially what it means isthat we work specifically for
doctors in my case mostlyveterinarians and we work on
their behalf.
So we work one side of theequation.
I don't work for landlords, Idon't work for sellers, I only
(02:38):
work for people that areactively looking for real estate
in some capacity and, like Isaid, we further kind of, I
guess, focus in, hone in on thehealthcare field and then
specifically with veterinarians.
So it really it specializes us.
It doesn't pigeonhole us per se, but we can really pardon the
(02:58):
pun.
We can really vet propertiesand get the correct ones in
front of our potential tenantsand buyers so that they don't
waste times on properties thatjust don't make sense for them.
Bill Butler (03:30):
And I got to tell you, just trying to find
commercial office space eventhough there's a ton out there
right now because of the currentmarket here in 24, it is a
royal pain in the butt.
Not all the locations arelisted and all the rates are
negotiable.
And just out trying to look onLoopNet or whatever your local
area has LoopNet's national, butCBRE and all these, they don't
list everything and they don'tshow where everything is.
(03:50):
And you know, I just want toknow what the dang rent is per
square foot.
And do you have the 1,500 to1,700 square feet I need for my
insurance operation and I haveto imagine, when you're working
with your clients, that you runinto the same thing and so you
know.
If you're a veterinarianlooking to open a practice or
(04:11):
expand to a new location or buysomething, why should they hire
a commercial real estate agent,specifically one who, as you
said, knows the industry?
Joe Flick (04:22):
That's a great question, bill, and I mean you
hit the nail on the head with.
When it comes to that, itdoesn't matter if you're a
veterinarian or a small businessowner, whether you have one
location or seven locations.
At the end of the day, you're asmall business owner.
You know what you're doing.
You're either taking care ofyour business, taking care of
(04:42):
patients that's what you'vetrained to do, that's what you
love to do.
Doing something like thistrying to find a space to lease,
trying to renew your currentlease, which we'll get down the
road and we'll talk about alittle bit down the road that's
all after hours things.
You don't have time for that,and on top of it, you're not an
expert in that area, so youdon't know what the market can
(05:04):
bear.
Like you said, all of a lot ofthose um.
Those properties aren't goingto have the base rent listed.
Bill Butler (05:13):
What type of um, what type of term negotiable and
the rate and the square footnegotiables, like what the heck
does that mean?
Joe Flick (05:23):
And if we?
Bill Butler (05:23):
build it out, and if we build it out, we're going
to throw in an extra five bucksa square foot, or you can build
it out, or you know.
There's just so many differentthings specializing with
veterinarians and then figuringout that you like working with
them.
And then how do you help yourclients, whether they're looking
(05:50):
to buy or lease a space.
Joe Flick (05:53):
Great question.
So I mean I'll give you theshort story on that.
My path was a little odd, butnot quite as crazy as some of
the ones I've heard.
Coming to Carr.
I was in the restaurantindustry for a long time.
I worked nights and it wasn'treally conducive to family life.
And one of our agents at thetime he lived in the
(06:15):
neighborhood.
We had kids the same age thatwere playing together and we
kind of just all gravitatedtowards each other and he told
me what he did and he told methey were opening a commercial.
So Carr is healthcare tenantsand buyers and at the time we
had a strictly commercialversion of what we do as well
(06:36):
Same process, same methods.
But anybody let's say we had adoctor that had a cousin that
owned a nail salon and they hada lease renewal or they were
looking for a second location.
Yes, we could do that, butthat's not what we're best at,
that's not what we're known for.
And so we opened a division thatwould focus on helping those
(06:56):
tenants and buyers, thoseclients out, and that's what I
was brought on to do.
With my restaurant background,I worked with a lot of, you know
, of course restaurants, karate,dojos, nail salons, small
business owners your generalstrip mall.
Yeah, yeah, general strip mall.
Bill Butler (07:12):
Tenants right.
Joe Flick (07:14):
Yep tenants, people that we're buying to, and you
know, while it was good, I think, covid, that was 2019.
And in the beginning of 2020,of course, covid hit and we
really started to refocus andthink about.
You know what it is that wewere good at and that's helping
people.
That help people healthcareprofessionals doctors.
(07:36):
And so we kind of reorchestrateda little bit and that brought
about my position beingliquidated in the commercial
industry and I went straight toanother buddy of mine, a partner
at the time.
He was working withoptometrists, ophthalmologists,
(07:57):
chiropractors and veterinariansand I jumped into his pipeline.
It was a match really thatworked out well for us.
He needed someone.
He was overextended, didn'thave time for his family.
And I was already there.
He didn't have to hire me andtrain me.
I already knew how car workedand what happened, so I kind of
(08:17):
just stepped into his pipelineand hit the ground running there
.
And veterinarians were, andprobably are still, about 60% of
my portfolio and who I reallyfocus the most bandwidth on
working with, simply becausethey're A they're fun to work
with.
Yeah, they're great.
They're great people to workwith.
Bill Butler (08:37):
Yeah.
Joe Flick (08:38):
Yeah.
Bill Butler (08:39):
And that's why you know we've enjoyed doing it as
well.
So you know kind of.
Back to that first question whyhire a commercial real estate
agent?
I'm not a real estate agent.
I'm not a realtor Trying tofigure out lease negotiations,
what's available.
All the building managers don'tlist rates.
What's funny is I've reachedout in my own search for my own
(09:01):
office space.
You reach out and go oh yeah,we don't list everything online.
You're like well, how the heckare you going to?
You know who who knows what'savailable.
Joe Flick (09:09):
Yeah, they don't want you, they don't want people to
kind of fish for pricing.
So you know they don't want youto be able to compare one one
building to another, and theyalso they use it, I guess, as
bait for people that aren'texperienced in the real estate
industry to call out If you'regoing in on your behalf.
The landlord or the listingagent is doing a cartwheel in
(09:30):
the background because they knowthat you're not trained in this
industry.
You don't have any marketknowledge.
And more than likely.
You're going to pay more thanmarket rent.
Yeah, whatever, and you're notgoing to get the concessions
that maybe you should be gettingin that market.
Bill Butler (09:46):
Here's what's crazy .
Here's what's crazy, joe, isthat I mean for everyone out
there when you start clicking onreal estate listings for
whether it's buy or lease, theyhave so much tracking stuff out
there that I would like I justgo to their website and they
start calling my office and.
I'm like how the heck did theyget all my contact info off of
(10:09):
me Just looking at a listing onloop net and you know Joe's
laughing at this.
But like seriously I was, Iwould get three to four calls a
week just just shopping onlineand it's like the ad shopping
for insurance.
Exactly, and so, like I said,shopping for insurance, we're
hot on your tail.
And so I think you know onething that you could do as the
(10:29):
commercial real estateprofessionals act as that buffer
where I'm not getting hit up byevery property manager that I
looked at, right.
Joe Flick (10:37):
Yeah, no, yeah, buffer is a great way, that's
actually a good way of puttingit, because they were helping
you.
It's always going to be anemotional process because it's a
very you know, it's afinancially burdensome process
to you.
In some capacity You're going,you're putting a huge, taking
out a large loan.
Bill Butler (10:55):
Yeah, you're putting a huge investment,
personally and and monetarily,into this thing and you want to
like.
That's your baby, that's whereyou're going to spend more time
than you.
Joe Flick (11:28):
Sure, no, you're absolutely right.
So being able to be in thatposition where we can filter the
information that we're gettingfrom the landlord or the seller,
because we know how sound bitesof what you need at the end of
a long day or during you knowwhen you get, when you step out
of an exam room for a couple ofminutes after seeing a patient,
to really see the bullet pointsof, hey, this is where we're at,
this is where I think we needto be, this is how we push back
(11:50):
and you know this, that oranother way.
And I'm really simplifying it.
But that's essentially whatwe're there for to be your
advocate.
And from that perspective toobecause we only represent
tenants and buyers, we don'trepresent landlords and sellers
we can enter into a fiduciaryagreement with our clients.
(12:14):
We're actively and legallyworking actually on your best
behalf, because there's noconflict of interest.
We don't list properties on theother side.
We don't have a tenant lookingfor a couple of spaces that
we're steering Steering's a badword in our industry.
Bill Butler (12:29):
That actually happened to me because I was
going to look at one propertyand they said, well, we have
this other property, we'll meetyou there, we can look at that.
And I'm like I don't want tolook at that building.
It's attached to a vacant thanthe one that I'm trying to lease
out to you.
And I was just like I mean, Iknew it was happening, but you
(12:59):
never think about veterinarians.
They just don't have time toscrew around with that.
So you know, if you're aveterinarian and you're thinking
, I want, I need either need anew space, I need to expand or
I'm going to start a practice,you know from your perspective
of what you do and you're basedin central Florida, just to put
that out there.
So you didn't have to go far tohit VMX, but you're in central
(13:22):
Florida, it was right in yourbackyard, right in my backyard.
We escaped the cold weather tocome down there.
Should they lease, you know,from your perspective, should
they lease or buy?
Joe Flick (13:34):
That's a good question and I really the answer
is it depends.
And the process is that initialphone call conversation that we
have is really about a gettingto know each other, establishing
a rapport, establishing trust,but also talking about what your
visions and goals are.
You know what stage of yourpractice life are you in?
(13:55):
What's the end game here?
Have you talked to yourfinancial advisor?
Do you have a CPA that you use?
Bill Butler (14:03):
Yeah.
So getting your professionalteam together, so a real estate
agent, lender, cpa, attorney,insurance, those are kind of the
five biggies that you really.
If you're thinking about eitherleasing, buying, because if you
lease you still might need abuild-out loan.
So you got to get the lenderinvolved and at some point
you're going to have to put adownstroke down.
(14:24):
That's where the financialadvisor comes into play to say
can you afford to suck in yourcheeks?
A little bit to jump in right.
Joe Flick (14:32):
Well said and it's yes.
And if you can purchase, great,but I guess what?
Or if you want to purchase, Ishould say then great, but we
just need to know what kind ofsandbox we're playing in and
what can the market bear?
So you might say, hey Joe, I'vegot $4 million just sitting in
my bank account, let's go totown.
I'm like, well, the areas thatyou're looking in there's next
(14:55):
to nothing and most of thetransactions are happening off
market because people are goingover each other to try to buy
this property when it becomesavailable and there are several
markets like that down here too.
So it's just kind of a it'ssetting the expectation level
Like, yeah, well, you want to bethere.
Well, so do seven other peoplethat I know, and probably 10
(15:18):
times that out there in the openmarket as well.
So letting them know what it is, what kind of financial buying
power they have if they'relooking to purchase, or also
looking breaking down and wehave the ability to do that with
some spreadsheets that we havebreaking down what it's going to
look like.
So, okay, hey, buying in thisarea, it's about $300 to $400 a
square foot.
Let's say they want what is a2,000 square foot building.
(15:40):
So we need to make sure thatwe're factoring in everything
that we need, includinginsurance, to see what that
bottom number monthly basis is.
Bill Butler (15:48):
And Florida's a whole different situation when
it comes to insurance.
We were chatting at VMX about,you know, insurance, and he said
, oh well, I don't have to worrytoo much about the coastal
stuff.
I don't deal with Fort Myers,or, you know, I've got some some
counterparts that I send stuffto, uh, central Florida, it's
not as bad.
Um, you know, we have our ownissues up here in the Midwest
(16:08):
right now with insurance, and soyou know, I think, like you
were saying, having a reallygood game plan and understanding
about, well, this is what Iwant to try and do.
How do all the pieces of thepuzzle fit into play?
I was actually on the phonewith a veterinarian this morning
from Miami and their loans heldup because the insurance they
(16:30):
thought they had they were notgoing to get now, and so you
know it's trying to put allthose pieces of the puzzle in
place.
You might have the perfect spot, but financing insurance, you
know it, it the next doorneighbor, the roof age isn't the
right, or or you know the the,the rehab costs might be too
much.
Um, now, you don't deal withvacant land buildups, do you?
Joe Flick (16:58):
Yeah, we can have, we can help with that Absolutely.
So that's, that's another partof the conversation that we have
at that.
Initial reach out is, you know,if there's nothing there, let's
go make that, let's find vacantland if it's available to.
Let's talk SBA loans versusconventional.
See what that looks like andthen you know really finding out
if we're talking purchase orbringing in the partners that we
need.
There are developers out thereall day that love veterinarians,
(17:19):
because I think we talked aboutthis too.
Their default rate is next tozero.
They're some of the lowest, ifnot the lowest, in the entire
commercial real estate sector interms of how little they are,
how sure of a thing they are.
So lenders love them and youknow there are plenty of
financial packages out therethat lenders can put together,
(17:43):
you know, of course, dependingon credit cashflow everything to
, to make that a possibility forthem, and that's just extending
the conversation as well, andwe're there to handhold them
throughout that whole process.
You know there are a lot ofperceived obstacles that come up
during the real estatetransaction process and we're
there to reassure them that youknow this isn't the first time
(18:04):
we've done it.
We're not reinventing the wheelon it.
We're going to show them, youknow, the best avenue to get the
deal done and to make sure, atthe end of the day, that they're
not getting taken advantage ofand that they have peace of mind
at the end of the night,knowing that they saw and
assessed all the options thatwere out there in the market and
that they made the bestdecision for themselves, their
family and their practice.
Bill Butler (18:25):
So you know where do you generally fit in the food
chain, so to speak.
So I'm insurance, I'm alwayslast.
Everybody calls me right beforeyou know they have to get the
documents into underwriting atthe, at the lender.
Do you generally get the callfirst, or does the bank get the
call first, or do they calltheir?
You know who.
You know where do you fit inthat that food chain or pipeline
(18:47):
, so to speak.
Joe Flick (18:49):
Oh, I'm usually near the front simply because they're
having an initial conversationwith you, know their family, and
then they're having it witheither a lender or they're
getting on, like you said,costar or LoopNet or one of
those platforms and just lookingto see what's out there and
after a while usually they cometo the same realization that you
(19:11):
did, bill, that you know I'moverwhelmed, I'm in over my head
here.
Bill Butler (19:14):
I don't want to do this anymore, but I need some
space.
So what the heck am I going todo now?
Joe Flick (19:18):
Exactly.
Well, what the heck am I goingto do now?
So they call a real estateprofessional that knows what
they're doing, hopefully, andthat works specifically with
vets, Similar to your world, youknow?
Could you work with, you know,just any agent out there?
Sure, but if you have theability to work with someone
that knows and understands theprocess specific to you, I mean
(19:42):
that's a game changer, Well, inyour industry right, because
building out an optometryfacility versus building out a
veterinary practice are twototally different situations.
Correct Same or differentsuppliers, different vendors,
different people that you needto surround yourself with to
make sure that you're making aninformed decision?
(20:02):
Yeah, you're absolutely rightthere.
Bill Butler (20:03):
Well, and I'm sure when you're out there looking
for your clients, you see youknow 4,000 square feet
differently for a veterinarianthan you do for the other parts
of your practice, where it's4,000 square feet for you know
optometrist or a podiatrist, oryou know somebody doing you know
a chiropractic clinic orsomething like that, where you
look at that kind of blankcanvas, where it's at if it's a
(20:25):
lease space or a purchase, andyou go, yeah, this is really
it's not going to work for aveterinarian, but it would work
great for this other industry.
Or, hey, optometrist guy, thisis really good for a veterinary
practice.
Let's, let's get one of her.
You know one of them in there.
Joe Flick (20:38):
So and sometimes you're right there, Bill.
We reverse engineer it.
I mean, we're like, hey, thisis a great spot.
There's nobody within a mile,mile and a half.
The demographics are great, thegrowth, the average household
income is up there.
What do I need to do to find aveterinarian that's looking?
Bill Butler (20:55):
to show them this location.
Joe Flick (20:57):
So you know I have no vested interest other than the
fact that there, you knowthere's a need.
I've established a hole in theindustry or in the local market
there where somebody could goand I'll reach out to you know a
local rep, somebody that workswith veterinarians all day and
just say, hey, do you haveanyone looking to expand into a
(21:18):
different location or anystartups coming down the line?
I've got a perfect place forthem.
So, yeah, so I mean that's,there are several different ways
to to get to the end game there.
Most of the time it's with aclient in hand at the very
beginning, but a lot of timesit's me finding the space before
I actually find the client.
And then going back to youroriginal point there about
(21:41):
looking at spaces and seeing ablank canvas, one of the first
things that you need to know,especially in the veterinary
world in the local market, iswhat the zoning ordinances are.
And they vary from county tocounty, municipality to
municipality, and it's key.
You don't want somebody that'scoming in and looking at it,
(22:02):
that's licensed in Florida butlooking at it from California,
looking at a Google map, findinga spot okay, great.
Bill Butler (22:06):
And then going down that path, jumping through all
those hoops, only to find outit's zoned industrial, not
commercial, and you're good luckgetting it rezoned or, you know
, you're jumping through amillion.
Joe Flick (22:18):
Yeah.
Bill Butler (22:19):
I've worked with a couple of businesses both inside
veterinary and outside, who,just you know, I was like, are
they find the perfect spot andthen they go.
Well, that was good for whatwas there, but you need X number
of parking spaces versus squarefootage because you're changing
the zoning and there isn'tenough.
And so, or there's one businesswas buying a building and the
(22:39):
bus stop was in front of theirspace and they needed pickup and
drop off and it just, you know,it was like 15 trips in front
of the city council to try andget the zoning change because
there was a bus stop there.
And you think how this sodifficult?
But the municipalities havetheir rules and if you're not
conforming to that, you mightfind the perfect spot, but again
, it just won't work out.
Joe Flick (23:00):
Yeah, and unfortunately we see that time
and time again.
We'll talk to doctors whobought land or bought a building
and then they have to turnaround and sell it or find a
different use for it simplybecause they didn't go through
the due diligence process, stepsnecessary to really um again
that the property correctlybefore um signing on the dotted
(23:22):
line.
And you know um, it's a, it's abig financial outlay from the
very beginning to do somethinglike that.
Oh, a huge time process too.
I mean not just the money butalso the time and scope and,
(23:54):
like you said, I think theirtime is just as important as the
money and a lot of times,usually those coincide, as we
like to say right.
Bill Butler (24:11):
So what's the most, so you know, between lease and
buy, what do you see from yourexperience and with your
counterparts at Carr being thelargest tenant, buyer, broker
for the health space, what's themost common real estate
transaction that you see?
Joe Flick (24:22):
The lease renewal really.
Bill Butler (24:24):
Really.
Joe Flick (24:25):
Which, yeah, lease renewals, and I'd say that's
probably of the transactions wehave within all the different
verticals that we do.
I'd say it's usually 40 to 50%of each agent's pipeline and
that might be more with us thanit is with other agencies out
there because we go after them.
First of all, you know it's nota transaction that you really
(24:48):
think of when you think ofcommercial real estate.
Bill Butler (24:50):
So I got my lease renewal offer from my landlord,
yeah, and it was franklydisappointing.
Just, I won't go into detailscause we're in the middle of my
lease negotiation or it's comingup, but let's just say um, um,
I was a little astonished, lessthan pleased.
It was hey, we're happy torenew you for five more years.
(25:12):
It's like I've been here for 10and I'm sure you want to renew
me for five.
So what are some pitfalls thatyou know?
Like that example right there.
I mean, you're just your kneejerk is well, I'm going to stay
here for five more years.
I mean, what, what is?
What do you do and what doescar do to help those tenant
renewals?
Joe Flick (25:33):
So the best thing that you can do from a tenant,
buyer, brokerage firm afterhiring one of us and game
planning is have an open mindabout what you're going to do
with your next step.
You can say, joe, I love mylandlord, I love where I'm at,
there's no way I'm moving and Isay that's great, mr Doctor.
(25:53):
But what we really need to dois we need to talk about posture
here, because the biggestthreat that you can make to any
landlord or get them to thetable because, at the end of the
day, they are seasoned realestate experts.
They know what they're doing.
They've likely been doing thisfor a long time.
They have an agent, maybethat's been doing this for a
long time.
(26:13):
They know how this dance works.
You do not.
So, going to the market showingyou what's out there and
actually touring locations andnegotiating on locations so that
you have a good perception notjust of the base rent maybe your
triple net expenses as well butalso of what kind of
concessions you can get fromother places out there your TI,
(26:36):
your tenant improvementallowance from a landlord to
physically build out a new spacefor them or for you.
Free rent, the amount of timefree rent, also on top of what
you would get to build out.
Bill Butler (26:48):
You're making me think about the people I've been
speaking with over the last twoweeks here about what I'm
potentially giving up, or like Ijust walk in and go oh, how
much is a square foot?
Oh, that sounds great, it looksawesome.
I'm just sign me up and free,rent, tenant, build out, uh,
finish.
I'm sure like the finishesyou're going to get, cause the
(27:09):
current spot we have, I'm justgoing to say 10 years ago we
didn't get what I would say issuper nice stuff.
So I don't even need to say,like, if I've got a year left on
my lease, like that's probablya good time to start thinking am
I going to stay here?
And if I'm going to go?
And if I'm going to stay here, Ishould go find a car, a real
(27:32):
estate professional somewhere inmy locality.
If you're in central Florida,call Joe Flick and say, hey, my
lease is up in a year.
What do you think we should do?
I'm going to get you on boardand figure out how to how to
maximize it.
I'm going to stay here, but howdo I, how do I get the best out
of, out of signing anotherfive-year or seven-year?
Because I mean, realistically,if you're a veterinary practice,
you're going to sign a five orseven like you're not going to
(27:53):
sign a two-year lease.
Joe Flick (27:55):
Yeah, you won't sign it, mostly because you're very
vested in that space.
You know your build-out is notcheap by any means.
Dentists and vets typicallyhave the most expensive
build-outs per square foot outof any of the healthcare
industries from what we see.
So I mean even with startupsthere.
(28:15):
You know the lenders are goingto require a 10 year note, so
they're going to want thethey're going to want the lease
to match.
Yeah, 10 year.
So they're going to want thatin some capacity, either a five
with a five-year option or a 10year.
But going back to our originalpoint there, and then we can
kind of touch that if we havetime.
But, yeah, the lease renewalprocess, there the bit, the best
(28:37):
thing we can do is go in therewith enough time, usually nine,
nine months to a year.
If you're considering looking,or we don't have any posture for
retail spaces for lease in thatarea, we'll make our own
posture.
We'll look at locations in youknow ground up locations.
Or we'll say Mr Landlord, hey,you know he likes where he's at,
(28:58):
but he needs more space, hisdream is to build.
You can't say that with twomonths left on your lease
they're like yeah, right Okay.
Yeah, okay, sure, float a brick.
We're going to, we're going togo.
You know you're not gettinganything out of us.
So what we need to do usually-.
Bill Butler (29:11):
The loan process by that point before you let alone
find a builder and land and thewhole deal.
Joe Flick (29:18):
Exactly exactly, and so you know.
Ideally nine months to a year,a year to 18 months.
If we're looking at ground upprojects, we're looking to at
least posture ground up projectsin the market there.
But the best thing we can do isreally go out, show them the
market, show what's there, andI'd say about 40% of the time we
(29:39):
have tenants that will end upmoving.
They didn't know, they weregung-ho about moving until we
actually got the process going,showed them other locations that
got excited, that got themexcited about it, introduced
them to different partners tohelp them move.
Maybe they have more frontage,more visibility, more parking.
They're accessing a differentpart of the market that they
(30:03):
didn't have before by simplymoving across to the other side
of the highway.
There are a lot of differentthings that come into play that
really help us build and nurturethat posture.
So when we go to the landlordand we initially start that
conversation, we have everythingelse already ironed out all
these other people looking totake us to the prom and all
(30:26):
these other sorry landlordslooking to take us to the prom.
We have all this firepower inour back pocket to then begin
the negotiation process, saying,hey, mr Landlord, he's willing
to stay, but we need to meet A,b, c and D, because the
properties down the street arewilling to do the same thing.
We're not asking for the moon,but we're asking for fair market
(30:46):
rent.
Sure, yeah, fair market rent.
A lot of times that there areescalations built into that year
.
Oh yeah, Into that rent on ayear-to-year basis.
Your lease probably has thattoo.
Yep Usually three, four,sometimes 5%, and after 10, 15
years of being in the same space, that usually outpaces the
market.
Bill Butler (31:04):
You've escalated past market rate.
Joe Flick (31:07):
Yeah.
So a simple reset saying, hey,let's get back down to market
rate, let's get you or let's getthem some free rent, let's get
some TI to it.
It doesn't have to be the exactsame as the spaces around, but
equitable to it.
So the TI maybe to refresh thespace, get some new flooring in,
maybe that's worn out.
(31:27):
You know all of that.
Bill Butler (31:29):
Are you describing my current situation?
Joe Flick (31:32):
Yeah, see, hey, hidden home there, bill.
But all of that, really itmoves the needle, because it's
typically one of the highestexpenses behind payroll for any
practitioners, especiallyveterinarians, is their real
estate costs.
Bill Butler (31:46):
Yeah.
Joe Flick (31:46):
So being able to reset that can cost you know it
can save them 10,000s of dollars, if not hundreds of thousands
over the course of a five or 10year renewal.
Bill Butler (31:55):
Yeah.
So moral of the story if you'regoing to buy a space, if you're
going to lease a space or ifyou're going to renew a space,
so it's pretty much coveringeverything you have from a
veterinarian perspective.
Unless you've bought your ownbuilding and you're you're,
you're just set.
But.
But if you're thinking aboutopening a practice or moving to
a new location or you're you'rea tenant and you've got a lease
(32:18):
renewal, what you're saying isfind a uh commercial real estate
professional specifically, joewould prefer a car uh
professional, but but there's,but there's plenty of
professionals out there but carknowing what they do, and so
you're Central Florida, but youknow CARS National as far as an
(32:38):
organization.
So if a veterinarian out therehears this podcast and they want
to reach out to Joe Flick atCAR, what's the best way to do
that?
I know you know you and I areon LinkedIn together.
We'll get that information outthere, but what's a good way for
for somebody to reach out toyou, joe?
Joe Flick (32:54):
You can reach me at by email or um at, uh joeflick
at carus, and that's C-A-R-Rus.
Bill Butler (33:04):
Two.
Joe Flick (33:04):
R's.
Yep, correct, yeah, two R'sthere, um, and then I can put
you, even if you're out ofmarket.
I can put you in touch with thelocal real estate agent that
best serves you.
Sometimes there are several, andit's nice to know which ones
have the most experience andwherewithal with veterinarians
there too, and I'm more thanhappy to put you in touch with
(33:25):
the local market expert that youhave there and you know whether
or not you use us or not.
Just make sure you're askingthe right questions, you know.
Make sure that they are tenantbuyer reps only typically, if
that's possible, that they'reonly working for you and not for
landlords, that they haveexperience in some capacity with
veterinarians and theintricacies and nuances of
(33:48):
working with those transactions.
And then also make sure thatthey are able to really hone in
and find spaces, be marketexperts.
Make sure they live, work andbreathe in your markets.
Drive them every day, otherwiseit's impossible to keep up with
expansion.
Also the hotspots you Also thehot spots.
(34:11):
What's new, what's dated, whatmarkets are dying and which ones
are coming up soon?
Bill Butler (34:17):
Yeah Well, you dropped a ton of gold nuggets
for our listeners.
Joe, it was a pleasure to haveyou on and it was awesome
meeting you down at VMX and lookforward to connecting you soon.
For those of you who arecatching this on a clip, I'm
wearing my Royal St Cloudpullover today, which is in
Joe's backyard down in St Cloud,Florida, in the Kissimmee area
(34:39):
and anyway, so it was greathaving you on Joe.
If Central Florida, make sureto hit Joe up, Otherwise we'll
have his contact information.
If you're looking for acommercial real estate
professional, you can find onethat specifically works in
animal health space through Joe,or just talk with one out there
and make sure you're beingrepresented by somebody who
understands the industry that weall work in.
(35:01):
So thanks so much for joiningus on this episode of the
Veterinary Blueprints Podcast.
Thanks for joining us, Joe.
Joe Flick (35:07):
Bill, it was a pleasure Appreciate you, sir.
Thanks for joining us.
Joe Bill, it was a pleasure.
Bill Butler (35:09):
Appreciate you, sir , and, as always, make sure to
like, click, review and sharethis with your friends.
It does help with all thealgorithms and we will catch you
on the next episode of theVeterinary Blueprints Podcast.
I'm your host, bill Butler.
Thanks for joining us, you.
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