A Unique Approach: HealthyTenant Sees Success In Only Representing Tenants In The Medical SectorPosted Feb 26, 2019
February 26, 2019 (Rockville, Md.) – HealthyTenant is the only tenant representation firm in the Washington, D.C., area devoted to the healthcare industry, and that business model has proven extremely effective in a short period of time.
Rather than rely on just traditional brokerage work like finding sites for clients, and then negotiating their leases, HealthyTenant subscribes to a full lifecycle approach where it supports clients in several non-transactional ways before and after the lease or purchase of a medical facility.
This is particularly important for multi-location practices, and those types of healthcare providers represent the bulk of HealthyTenant’s client base.
“While there are several good commercial real estate firms for large corporations and landlords, most of our revenue is non-transactional and non-commissionable. We’re providing a variety of services on an ongoing basis to repeat medical clients that have numerous sites throughout the D.C. and Baltimore regions,” says HealthyTenant President Mike Norris, LEED AP, SIOR.
Since its founding in August of 2016, HealthyTenant has experienced significant growth. Gross revenue, for one, is expected to soar roughly 450 percent in 2018 from 2017. Projects completed will likely rise 150 percent during that same duration. Finally, over the past two years, the firm has earned 30 new clients, increasing its overall roster to more than 60.
HealthyTenant, which maintains offices in Rockville and Fairfax, has a seasoned four-person advisory board providing additional healthcare, legal and accounting resources, as well as supporting independent contractors and three full-time licensees, including Norris’ long-time colleague, Ben Heller. The duo previously served a bevy of medical providers for many years while at Scheer Partners and The Ezra Co. Norris, who has also managed and underwrote complex healthcare facilities, notes that HealthyTenant is hiring opportunistically at this juncture.
The current public policy considerations, shifting healthcare sector trends and continual certification requirements create a challenging landscape for medical practices. That results in an extra layer of complexity for HealthyTenant advisers as they provide an abundance of services to their clients, such as fair market-value studies for Stark Law compliance, facility management consulting, lease management and enforcement through its client portal, and passthrough analysis and project management coordination, in addition to lease negotiations and renegotiations.
“Outsourced healthcare administrative companies can handle insurance reimbursement rate negotiations, and general real estate brokers will transact leases, but we fill the gap by managing the full lifecycle of a practice’s facilities,” says Heller.
Because real estate is a practice’s second largest expense (which is also the title of Norris’ 2014 book on tenant representation), and largest liability, reducing clients’ lease expenses and liabilities is of vital importance to HealthyTenant.
But that’s not the entire story, says Norris. “We’re assisting our clients to use their facilities to enable top-line growth with more revenue-generating space, like creating staff pods to create more exam and procedure rooms. Fierce competition is also leading our clients to introduce complementary services, which helps to offset reductions in reimbursement rates and improve overall buying power with insurance companies.”
One long-term client of Norris and Heller is CCI Health & Wellness Services (CCI), a non-profit healthcare provider based in Silver Spring that has 15 D.C.-area locations and a work force of 260. HealthyTenant handles all of this client’s leases – and, along the way, vastly decreased CCI’s total real-estate costs.
Kathleen Knolhoff, CCI’s president and CEO, says of Norris: “It’s an easy process with Mike. We can trust him, and he’s proven that over and over.”
Dr. Henry Fishman, who leads Fishman Allergy & Asthma in D.C., has known Norris for nearly a decade. HealthyTenant represented this practice in a relocation to 3,400 square feet at 2021 K St. NW as well as its subsequent 2,100-square-foot expansion, due to Fishman Allergy & Asthma’s staff growth.
“He saved us a great deal of money,” Fishman says of Norris. “He gives us excellent personal attention, has good relationships with architects and contractors, and sticks with us until any problems are sorted out.”
HealthyTenant also recently renegotiated a 2,500-square-foot lease for Sensational Kids Therapy at 4400 Jenifer St. NW in the District of Columbia. As part of that deal, Norris secured rent abatement and a tenant-improvement allowance for enhancements to the space.
A pediatric occupational and physical-therapy practice, Sensational Kids Therapy has unique specifications for equipment, such as swings and climbing walls, and Norris’ understanding of this client’s customized needs – and the broader medical field – is pivotal.
“Mike always goes to bat on our behalf, he provides honest opinions, and we feel confident working with him,” says Shiraz Kashani, Sensational Kids Therapy’s co-director.
HealthyTenant is the first and only full lifecycle healthcare tenant representation firm in the national capital region. Over the last 18 years, its providers have reduced facility costs and liabilities for practices throughout the term of the practice’s lease and occupancy. With offices in Fairfax and Rockville, HealthyTenant implements a seamless lease management process to enable multi-location medical practices to efficiently maximize revenue from their facilities and leases. For more information, please visit www.healthytenant.com.