Portfolio: 2 million square feet of medical office space spread across the United States from Florida to Hawaii.
Challenge: Since my primary focus is healthcare real estate management and leasing, the biggest challenge for my team is getting our arms around the growth of the healthcare industry as it relates to real estate management and leasing. Medical office buildings are a proven asset class—outpacing the commercial office sector during this market cycle—but to really excel you have to understand the market dynamics and the political landscape that shape the healthcare industry. Not only do we need to manage to a higher standard, but also we need to understand the physician's practice so we can add value and help our tenants be more successful.
It used to be that when you went to the doctor to have a medical procedure, you went to a hospital. Today, many of those procedures are taking place in the medical office buildings and ambulatory surgery centers that we manage. Unlike commercial office space, many are open seven days a week, sometimes 24 hours a day.We've had to adapt our management techniques accordingly.
The reality of managed care is that we cannot be the most expensive option out there. Our tenants are getting a smaller percentage of insurance reimbursement, so we need to respond with a competitive rate. We've also committed to being socially and environmentally responsible, for both new development and our existing properties.
Strategy: We've poured a lot of resources into education and research. For us to achieve our goal—to provide services that will enhance the relationship between the physician and the patient and make the doctor's business more profitable—we have to manage both the bricks and mortar and the unique opportunities for healthcare tenants. We try to identify synergies where we are able to put together the right mix of doctors into a single development so they can benefit from cross-referrals. We look for valueadded services like electronic medical record storage and supply e-procurement. All this while working to create an appealing (and hospital clean) environment so our tenants will stay in our buildings and refer people to our buildings.
From the real estate side, we're taking part in the ENERGY STAR program. We've accepted BOMA's 7-Point Challenge to reduce energy compump[tion by 30 percent by 2012. We've been working toward LEED certification in our new developments. In our existing buildings, we constantly work to maximize our operating systems and improve the quality of the environment inside the building envelope. It's absolutely critical that we keep pace with the best practices in building operations, for example, by participating in BOMA's annual benchmarking report, the Experience Exchange Report.
Conference Perspective: That's where the BOMA International Conference and The Office Building Show excels. It's all about exposure—building a sense of awareness about other folks' methods, including the pluses and the minuses. I also want to mention the Medical Office Building Seminar that takes place just before the BOMA International Conference. BOMA embraces healthcare real estate. Both events are great for real estate education and bringing together a fantastic group of industry peers.
For me, the single greatest benefit of attending these events is building my peer network. Just last week I was able to leverage my network to ask questions about business opportunities in a new region for us. It was like we knew one another and shared a similar vision.
And the other great benefit is the tradeshow. The Office Building Show is excellent. It's really important for us not just to learn about the latest products out there but also to see them, touch them and meet the people behind them. Building relationships with our vendors helps us recognize and understand new opportunities when they arise.