s o lu t i o n smid-year a publication of ensemble real estate solutions 2015

Summerlin Medical Office I-II Las Vegas, Nevada

Developed by:Ensemble Real Estate Solutions

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For more information:

Debor ah t us sing spencersenior V ice president

702/216-2365dspencer@ensemble.net

Medical space avail able on the suMMerlin hospital caMpus

summerlin Medical of f ices i- i i- i i i 6 5 3 n to w n c e n t e r D r

1010 5 b a n b u r r y D rlas Vegas, nevada

� Conveniently located on the campus of Summerlin Hospital Medical Center

� Summerlin I-II was the 2013 TOBY Winner - “The Outstanding Building of the Year”

� Laboratory, Radiology, Physical Therapy and Dialysis on-site

� Significant Primary Care practice base for referrals

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s u m m e r l i n M e d i c a l o f f i c e i i i

s u m m e r l i n M e d i c a l o f f i c e s i - i i

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contents2 Feature Property

4 Feature Article

7 New Employees

8 Recognition

9 Perspectives

10 Out and About

12 Property News

14 Ensemble Transactions

16 Ensemble FunFor more information:

RANDY MCGRANE

602/912-8995

Medical Real Estate

BIG

IS HERE

Thing in

The NEXT

Introducing Ensemble’s Tenant Advocacy GroupTM

A Focused Approach to Providing Healthcare Providers a Specialized Real Estate Service

Tenant

GAdvocacy

roupTM

Your Very OwnReal Estate

Department at NO COST to You!

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What’s your plan for success When opening your Medical office?

Ensemble Real Estate Solutions recently convened a roundtable discussion, moderated by Randy McGrane, Founding Partner, CEO, around the topic of starting medical offices in today’s rapidly changing healthcare environment.

The following seasoned professionals who regularly work with those in the medical industry participated in the roundtable:

Michelin Abrahamsen, CPCU is the President of Desert Mountain Insurance Services, Inc., an Independent Insurance Agency specializing in healthcare accounts. She comes from an insurance family and began working in the insurance business as a teenager. After college, Michelin was a senior underwriter at a major insurance company specializing in malpractice insurance and earned the prestigious Chartered Property Casualty Underwriter designation. Contact her at michelin@desertmountaininsurance.com.

Marina Hammersmith, CCIM is a Senior Vice President, Healthcare Brokerage Services for Ensemble. She has more than 20 years of hands-on experience in healthcare asset management, property management, sales and leasing. During her 16 years at Ensemble, Marina has developed a widely known expertise in the field of healthcare real estate as a strong client advocate at numerous hospital campus and off campus locations throughout the valley. Contact her at mhammersmith@ensemble.net.

Randy McGrane is a Founding Partner, Managing Director and CEO of Ensemble. In addition to working extensively on business development, Randy oversees acquisition and disposition of property and manages long-term financing with the institutional debt markets. He has cultivated his vast operational expertise throughout his 30-year career, which began in the commercial construction industry in California. Contact him at rmcgrane@ensemble.net.

Zandra L. O’Keefe, CPA is a Managing Director for CBIZ and shareholder of Mayer Hoffman McCann, PC. She provides accounting, tax planning and compliance services as well as extensive business management consulting to a diverse group of closely held businesses, their owners and high net worth individuals for the Phoenix office tax division. She specializes in professional service businesses including physician owned medical group practices. Contact her at zokeefe@cbiz.com.

Candace Hunter Wiest is the President & CEO of West Valley Bancorp, Inc. and West Valley National Bank, the West Valley’s only locally owned and operated community Bank. She was recruited to organize the Bank in March of 2006.

In addition to serving small business and medical professionals, in 2014 the Bank launched AZ Dental Bank, a specialty division of WVNB. Contact her at cwiest@wvnb.net.

Jim Wolfe is the President of Wolfe Consulting Group, Ltd. and has been a practice management business consultant for more than 30 years. Prior to forming Wolfe Consulting, he spent eight years in the real estate development and home building industries with a Fortune 500 company in Canada and the U.S. Contact him at jdw@wolfecon.com

W h y s t a r t a n e w M e d i c a l o f f i c e?

Randy: A great book that we like to refer to is “Start with Why” by Simon Sinek. I think we would all agree that the first step in helping medical professionals with a new office is to make sure you have explored the question of “why” they want to open a new office in the first place. To provide a solution, you have to know what problems you are solving.

Candace: We consulted with a medical practice a few years ago that was considering selling to a large healthcare chain. We asked them many “why” questions. The bottom line was there were no compelling reasons to sell at the price they were being offered. After that conversation, they decided not to sell, which turned out to be a good decision.

Zandra: A young orthopedic surgeon came to me for advice about setting up his own office. I asked him if he had considered partnering with others to leverage his overhead costs. He was young, was a high-producer in a good location, had the drive to do it on his own, and he had several other investments he could use to help start the practice without having to get a bank loan. For him, it was the right move.

Michelin: In our work with smaller medical practices, we see a strong desire among the physicians to help others. They may be unhappy with the current state of medical insurance but they still love medicine and want to have a direct influence on helping patients.

Randy McGrane, Michelin Abrahamsen, CPCU, Jim Wolfe, Zandra L. O’Keefe, CPA, Marina Hammersmith, CCIM, Candace Hunter Wiest

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Marina: For some physicians, it’s ego—and I mean that in a good way. These doctors want to make their contributions to the patients and the practice, and they are driven to go in the direction of an opportunity that will best fit that desire.

Jim: We don’t see many start-ups right now with doctors who have just completed their training. The ones that we’re seeing are disgruntled within a group and forming another group. Or, a group gets large and splits in two. Corporate employment models are changing, and that’s creating distress for some physicians. Many new practices are pretty small—one or two physicians—rather than the formation of larger groups.

Randy: How do you develop a business plan in an uncertain landscape?

Zandra: If you want to be successful, you need to work with professionals to help you develop a comprehensive plan that includes the various topics we’re addressing here—taxes, finance, insurance, real estate and banking.

Candace: We help clients take advantage of available resources. For example, once we realized that the Affordable Care Act (ACA) was going to be a reality, we offered to work with our physician clients to analyze the impact on their top line revenue by running a “shock test” based on estimates of a cut in future reimbursement rates. About a third declined the offer and ended up selling their practices to hospitals, a third chose to continue as is, and a third really spent a lot of time reviewing each scenario. They looked at the impact of a decline in reimbursements and realized they may need to diversify their payer mix, bring in other partners to diversify their practice services to create more revenue, or re-examine their overhead to reduce or share more expenses.

Marina: When they’re looking at their overhead, these costs include real estate. There is a perception that real estate is a large portion of overhead but it’s really not. However, they need to look at their payer mix and geographic factors. Is downsizing an option? They may also look at Class B space versus Class A, or buying versus leasing. Because real estate prices and interest rates are still low, buying may be a good option.

Randy: On the leasing side, we’re also seeing shorter lease terms ecause of the uncertainty of the medical industry.

Michelin: We see physicians in their thinking-mode—when they are thinking of adding cash-based procedures and want to know if their insurance will cover those. It could be hearing tests, or weight management. For some physicians, these additions are helping financially.

Zandra: We’re seeing some physicians engaging in joint ventures (JV) with the hospitals to positively impact patient stays and care. We’re also seeing strengthening of affiliations to leverage what synergies they have. These JVs seem to be initiated by the hospitals but they have had a positive impact financially on the physicians, too.

Jim: There are still some solo practitioners out there but they’re rare. It’s fairly difficult in this environment because of overhead costs so they sometimes share overhead. These are typically practitioners who want to remain independent and are satisfied with less income.

Randy: How can we help solo practitioners and smaller practices succeed?

Jim: We can help them develop a comprehensive plan and benchmarks to measure their success. They’ll need that for a bank loan, too. It has to be a plan that they’re comfortable with because they’re the ones that have to implement it.

Michelin: With malpractice insurance, there are ways to educate them on risk management to keep costs lower. There are not huge insurance discounts until the group is more than 20 practitioners. Many insurance companies have hotlines that the physicians can call for their risk management questions.

Candace: We have industry guidelines that practices can utilize to see if their expenses are in line with industry averages. Having good risk management practices is huge, especially with solo practitioners.

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What’s your plan for success - continued -Zandra: The first thing we do with clients is to help them understand their financial statements and how that affects their financial health. We can then help them identify tax advantages if they’re buying a building or big equipment as far as when to take deductions, particularly when it’s financed. We can also help them plan financially for physician owners coming and going, or buying versus leasing decisions.

Randy: For a small practice, we counsel caution when it comes to trying to own their own office. We introduce them to the concept of reversionary value of real estate. How much is that asset worth in the future based on the marketplace? When we look at the value of

commercial real estate, it’s never the physical building—it’s the desire and demand. The demand is the physicians’ need to practice but their desire can be affected by outside forces. For example, with a dental practice that’s built a business in a certain location, they’re not going to pick up and move locations. It may be better for them to own. If you can’t say with confidence that you will be there for the foreseeable future, it’s usually better to lease.

Candace: Two important questions to ask practices that are selling, merging or affiliating might be, “What have you signed away and who owns the receivables?”

Michelin: Sometimes groups send us their entire real estate lease to review, not just the insurance portion. We can’t help but notice at times that some groups are receiving better terms than others. We can advise them to have a professional help them review their lease terms before signing. With a claims-made malpractice insurance policy, there can be a tail payment of 200 percent of the current premium. Tail is what closes out the policy to cover any incident that happened while practicing. If you truly retire, the cost can be low or none. However, many physicians go on to be a medical director or have some other medical position.

Randy: What is changing regarding location of practices? What are current factors that come into play?

Marina: Locations are strongly driven by hospital associations, JV partnerships, payer mixes and underserved populations. Providers want to be in the community--accessible to their patients and in proximity to the hospital if necessary. With the consumerism of healthcare increasing, retail store fronts are attractive options as well.

Randy: There is so much disruptive innovation that is impacting the industry such as retail sites, telemedicine, a new lower cost lab company, and viral immunology in cancer treatment. Another disruption is the shift from employer-based to private-based health insurance. An executive from a local healthcare chain recently predicted that by 2020, 100 million people will be purchasing individual insurance policies rather than employer based.

Candace: I believe there is a risk to relocations given the consumers’ desire to be in close proximity to their physicians. I also think as you consider a location, take a long view. What will your practice need in 10 years given the changes in technology, medical structure (hospitals changing the need to be close to a hospital) and your current patient base?

Jim: Individuals paying for their own health insurance are taking on larger deductibles and that trend is leading to more negotiated prices for healthcare services at the doctor’s office.

Zandra: Practices of all kinds continue to be engaged in various transactions, consolidating and splitting off. Some have quite a bit of value in the location, payer contracts, and leverage of their people and equipment. Practices will need experienced collaborative partners to work with management, their contracting consultants, legal counsel and physician owners to analyze what they have and help them get positioned for success.

Candace: The pendulum is shifting. We’ll be seeing more partnerships come together. Physicians’ lives will be better and it’s better for healthcare.

s u m m a r y

If you’re looking to open a practice in today’s healthcare climate, it’s important to understand the “why.” Much like consumers of healthcare rely on a consortium of providers to map the road to health, physicians can create a team of trusted professionals to walk them through the process.

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Please join us in welcoming our new members to the Ensemble team!

Kiley BishopM a r k e t i n g a s s i s t a n t

p h o e n i x , a Z

Mary Ann Korpia c c o u n t i n gp h o e n i x , a Z

Barbara Olsoni n t e n a l o p e r a t i o n s

l a s V e g a s , n V

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Conrad GarnerRodolfo Del Rosario

Tracy Johnson

Letha Coffin

Pam Villareal Wins BOMA Principal Member

of the Year’ Award

Please join us in congratulating the following employees as

they celebrate milestone anniversaries with Ensemble.

Thank you for all you do!!

At an event held at The M Resort in Las Vegas, Pam Villareal was presented with the award for Principal Member of the Year by the Nevada chapter of Building Owners and Managers Association (BOMA).

This award of distinction recognizes the outstanding effort and achievement of an individual going beyond the scope of their positions to enhance the commercial real estate industry and the community at large. The Board of Directors reviewed all nominations and voted on a final ballot of qualified candidates for voting.

“This award is an outstanding achievement as it signifies Pam’s involvement, commitment, achievement, leadership and professionalism and her time and contributions to BOMA Nevada.” said Linda Holzapfel, Executive Director, Property Management for Ensemble. “Pam’s contributions to the real estate industry go above and beyond her day to day responsibilities at Ensemble and we are pleased to congratulate her on this important recognition.”

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Some landlords and sellers may have an opinion that if they use broker representation when selling or leasing space, they will spend unnecessary dollars for a listing commission and they may be inclined to list it themselves. This misnomer could cost the owner precious time and dollars. Listing brokers can provide an invaluable insight into market activity, pricing tactics and advertising. A broker’s knowledge of market pricing and activity can provide a seller or owner a better understanding of trends within the competition so their project can be priced appropriately. A broker is also able to investigate the nuances of closed transactions and provide invaluable feedback in this regard.

A listing broker can undoubtedly broaden the reach of marketing for a listing. This is, after all, what they do every day. A broker maintains a valuable network of other brokers, owners and users who may be future prospects. They also have access to a broad range of broker databases and other marketing venues. All of this will ensure that your property gets noticed!

Lastly, if you do have a prospect for leasing or purchasing your property, the broker can handle the negotiations for you. This can be a time consuming and arduous task and engaging a broker will keep the discussion “arm’s length” keeping the owner/ seller out of the hot seat.

In the end, it may be difficult to quantify the value of having representation when listing your property; however, there are many aspects of your business in which you rely on professionals to guide you. This is just another opportunity to bring in assistance so you can focus on what you do best.

AlwAys Use A BrOKerby Marina hammersmith, cciM

C o n g r a t u l a t i o n s !

to Ensemble’s Az Business Leaders 2015

TrAcY AlTeMus, ccIMMedical Broker category

BIll MOllOY Commercial Developer category

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Maricopa county Medical society members open house to celebrate their new cour tyard and facelif t.

2015 pch beach ball lemonade soiree

Murray gares, cciM, Marina hammersmith, cciM and tracy altemus, cciM at a Diamondbacks game with first citizens

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sun health board members attended sun health’s 2015 board of Directors and community leaders retreat.

Marina hammersmith, cciM at the corenet conference

Valley par tnership friday Morning breakfast: how to Develop real estate today for the healthcare industr y of tomorrow?

summerlin and spring Valleyhospital Medical center physicians at the 2015 nevada health care forum golf tournament

realshare conference series “convergence in the healthcare real estate industr y”

randy Mcgraneensemble real estate solutionspanelist

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Ensemble Real Estate Solutions recently negotiated the sale of 1848 E Thomas for $1.55 million or $127 per square foot.

Pulse Investments, LLC purchased the 12,189 square-foot medical office building located at 1848 E Thomas Road in Phoenix, Arizona.

Tracy Altemus and Autumn Storm brokers with Ensemble’s Phoenix office represented the seller Thomas Medical Group, LLC. The buyer’s broker was Steve Beck with Cobe Real Estate.

The over 12,000 square foot property consisted of a two-story building with a basement and a separate free standing building. The property is located in a prime location on Thomas Road with immediate access to SR 51. It is also directly across from Phoenix Children’s Hospital and adjacent to Arizona Heart Institute.

“The location was ideal for the buyer’s plan to open a surgery center in the heart of the medical corridor on Thomas Road,” Altemus said.

Built in 1985, 1848 E Thomas is located in an ideal central Phoenix location with neighboring medical facilities. The vacant building’s previous use was as a radiology center.

Ensemble Real Estate Solutions completes $3.35 million sale of a commercial property

Ensemble in conjunction with R.O.I. properties has negotiated the $3.35 million sale of a dry cleaning establishment located at 881 Via De La Paz in Pacific Palisades, CA.

Tracy Altemus, of Ensemble’s Phoenix office, along with Beth Jo Zeitzer and Justin Cirell, of R.O.I. Properties, represented the seller in the transaction.

The seller was Colossus Limited Partnership II and the buyer was an investor group called 881 Lapaz LLC.

The 2,500 square-foot building stand alone building is fully occupied by a dry cleaner tenant who recently renewed a ten year lease. There was significant interest in the building as it is located in a prime walkable and vibrant small central retail business district consisting of boutiques, banks and offices. The existing tenant has been operating at the location since 1988.

If you are considering selling give us a call 888/428-2228 for a FRee MARKet AnALysIs

JUST SOLD1848 e Thomas rd

Phoenix, AZ

881 Via De la PazPacific Palisades, CA

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Deer Valley Medical Offices II-III

raise The Gates

The parking gates came down and there is now FREE PARKING at the Honor Health Deer Valley Medical offices!

Ensemble was on hand to help celebrate the occasion with Hospital staff and tenants and everyone enjoyed some Italian Ice while the gates were removed.

Tracy Altemus, Executive Vice President, said. “We’re grateful that HonorHealth, Lillibridge, and Ensemble were able to work together to bring about free patient and staff parking on the entire campus.”

Deer Valley Medical Office Parking

Raise The GatesJune 30, 2015

The Day the Gates Came Down!

NO MOre VAlIDATION

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n e W te n a n t scentennial hills Medical plazaNevada Children’s ClinicLas Vegas Medical Group

Deer Valley Medical plaza iiOmniWestHonorHealth

Deer Valley Medical plaza iiiArizona Center for Hematology & OncologyHonorHealth

Desert Valley Medical plazaAIBioTech

fountains Medical plazaKulbhushan Sharma, PC

goldring Medical officeHelga Fuenfhausen Pizio, MD

paseo de luces plazaGustavo Lopez, MD

la loma Medical plazaVersatile Medicine

santa fe plazaNancy Barron

sparks Medical officeUHS Telehealth

summerlin Medical office iValley Health System

thunderbird paseo Medical office iiValley Perinatal Services

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r e n e W a l te n a n t s3811 bellValley Vascular SurgeonsGary A. Rostan, DO

apache Junction Medical plazaTaylor Y. Kim, DDS

canyon springs Medical plazaArizona Hand & Wrist Specialists

Deer Valley Medical plaza iiiAffiliated Dermatology

Desert Medical plaza iArizona Heart & Arrhythmia Clinic

Desert Medical plaza iiOrthopedic & Sports Physical Therapy

Desert Medical plaza iiiAZ Kidney Disease & Hypertension CenterSouthwest Fertility Center

edwards Medical plazaArizona Transplant AssociatesBanner HealthDouglas Schwartz, MD

la loma Medical plazaVersatile Medicine

rosenberg children’s Medical plazaArizona Pediatric Eye Specialists

santa fe plazaThomas Kruzel, MD

thunderbird paseo Medical office iBalwinder Pawar, MD & Karnil S. Dhillon, MDPaul Kline, DDS, PC

centennial hills Medical plazaMichael C. Tenby, MD

Desert springs Medical plaza iiAllan Stahl, MDAmir Qureshi, MDJSA Healthcare NevadaValley Health System

goldring Medical officeCarl Williams, Jr, MDClinical Research Medical CenterLuis Sanchez, MD, PCMaurice Gregory, Jr., MDTheodore Potruch, MD

shadow lane Medical office Alexander Sparkuhl, MD & Ranjit Jain, MDBoyers & BeckerGeneral Surgery AssociatesSohail Anjum-Dost Wattoo, MDs

spring Valley Medical office i General Surgery AssociatesNaomi Chaney, MD

spring Valley Medical office ii Lamotte Pediatrics

summerlin Medical office iBiliana Darzev, MD Butler Family Medical CenterLindsay Hansen, MDMichael Verni, MDMolouk Rahnema, MDMountain Podiatry

summerlin Medical office iiPerozek Professional Corporation

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Light it up Blue! Wearing blue for Autism Awareness Day.

April Fools Day Fun at Ensemble

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888/428-2228

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