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Chris Ressa:
Welcome to Retail Retold everyone today, I’m joined by Brian Perry, Brian is a broker in, focused on the health care industry. For E x P. He’s based in the Mid Atlantic. Excited for him to be here. Welcome to the show, Brian Perry.
Brian Perry:
Thanks, happy to be here.
Chris Ressa:
So Brian, tell us a little bit more about who you are. What you do.
Brian Perry:
Okay, I am originally from Jersey, moved here after my M. B, A M. living in Jersey, worked in New York. Previously moved to the D C area. January twenty, twenty, Um, to kind of start getting going with my commercial real estate career as kind of recruited through military recruiting. M. So you know Two thousand twenty got started here. Met, a lot of people made Lot of relationships during that time when things were not as good, and now I focus D. C. Maryland and Virginia. The d. M B is primarily where I focus on health care tenant, tenant, rep, tenant rep, mostly, and some landlord.
Chris Ressa:
So you were in. Where in New Jersey from? I didn’t Now you’re from New Jersey. I live in New Jersey.
Brian Perry:
Oh yeah, so I’m from a small town called Long Valley.
Chris Ressa:
Oh my God, know it well,
Brian Perry:
Yeah,
Chris Ressa:
lot of friends there,
Brian Perry:
yeah,
Chris Ressa:
Westmore Central
Brian Perry:
that’s
Chris Ressa:
Man,
Brian Perry:
that’s where I went to high school.
Chris Ressa:
You went to West
Brian Perry:
Yeah,
Chris Ressa:
Mors,
Brian Perry:
yeah.
Chris Ressa:
So I’m from the Netconbiermaria,
Brian Perry:
Oh yeah. so you’re like you’re from my hood. Basically okay.
Chris Ressa:
Exactly, So I don’t live there now, living a town called Kinnalon, but I went to Lennop Valley high school
Brian Perry:
That’s nice
Chris Ressa:
right there, beautiful area, Long Valley. It’s been booming. Actually, it’s been growing pretty pretty significantly. Over the last few years, a lot of people have been moving out there and working out east for those who don’t know Long valleys like you know,
Brian Perry:
North,
Chris Ressa:
pretty country area, north western New Jersey, not far From the border of Pensylvania,
Brian Perry:
Right. Yeah,
Chris Ressa:
Uh, and so from Long Valley, you mentioned military. You were in the military.
Brian Perry:
Yeah, so I, I’m a veteran. served go on Tatoo Bay and I rack. That was my first kind of career. and then I started working.
Chris Ressa:
Thank you for your service.
Brian Perry:
Of course, then I started working in New York City, which is what Jersey people do they go to? I mean, at least that’s what I did. I wanted to work in New York after after service, So I did that for about six years lived in. I’m sure you know who book and M.
Chris Ressa:
Me
Brian Perry:
Yeah,
Chris Ressa:
too. I lived in Hoboken as well.
Brian Perry:
So yeah, right there, park a, right next to the The train there seventy seven Park. I think I was there.
Chris Ressa:
Okay.
Brian Perry:
So that was my life for like six years, but yeah, that’s
Chris Ressa:
What d you do what you do in New York? What were you doing?
Brian Perry:
I worked at a company called Fitch Ratings. It was like you know analyzing credit risk financial portfolios. I did some weird things like tobacco, and you know analyzing those payments that they have to do, and student loans credit cards. So a lot of like Um, portfolio review, and when I was there was the time Whand everybody was down on the rating agencies and trusting them. But for me it was a good, really good experience to be in New York. That’s what I wanted to do. look at numbers and do that thing. So that was
Chris Ressa:
Yeah,
Brian Perry:
fun.
Chris Ressa:
I think the railing agencies Came through. You came really high lighted to the general public on some challenges through the movie Too big to fail. Did you see the
Brian Perry:
Yeah,
Chris Ressa:
movie?
Brian Perry:
of course, yeah, so,
Chris Ressa:
Yeah,
Brian Perry:
but that’s what it is. It’s a relationship. It can get too cozy in a relationship business like that and people, just you know, I don’t. I don’t want to,
Chris Ressa:
Yeah, I get
Brian Perry:
but yeah,
Chris Ressa:
it. I got it.
Brian Perry:
yeah,
Chris Ressa:
I get it. So if you haven’t seen too big to fail, it’s a really entertaining way to talk about the great financial crisis. You should
Brian Perry:
Right,
Chris Ressa:
go see it, everybody. Uh, how do you? How do you end up in the D, M. V, and in commercial Real State?
Brian Perry:
Yeah, because I don’t have. I didn’t have a background in that. The most I knew was my mom did residential, which is not commercial. I, really, I was looking in the finance, marketing to work in New York. I had almost gone to the Madison. I ended up going to Boston College for my M. B A, but I almost was going to go into brand management because I like marketing, and I got accepted into the Madison in Wisconsin, M B, a brand management and he really Pretty selective, But I didn’t want to go to the Midwest being a jersey guy. Um, but after that I came back and I was like from Boston. I came back. I got there is a military that. it’s called the Lucas Group. They do military recruiting, and to be honest, I just kind of went down the list, Um, potential things I might want to get into and
Chris Ressa:
I got to write this down. What are they called?
Brian Perry:
The Lucas group,
Chris Ressa:
The Lucas
Brian Perry:
So
Chris Ressa:
group?
Brian Perry:
my my company that I just left. They were recruiting military to come down to come to the D, N B, and I was like Okay, I’ll come check it out. I had a condo there, so I wasn’t. I bought like a year earlier, so I wasn’t planning on moving, but I went down there. You know, they talked to talk. They say hey, there’s an opportunity here. I really like that they were niched in Health care because that’s just how my brain works. I have to have a lane where I focused and uhjamily business, really nice, sold me on it and I moved, you know, a couple of months after I came and visited them down here. Um, and I just got to work soon after That was January twenty twenty. About Um that I came down and and that’s when I said A bit
Chris Ressa:
A wild time to enter commercial real estate man? A wild wild time, because ninety days later like there wasn’t a lot of transactions happening,
Brian Perry:
That, Yeah,
Chris Ressa:
so how did you in such a short time period like create a nitch and get like clients for lack of a better word.
Brian Perry:
I think, because I had already understood I was going to do my own business almost before, so I kind of understood that the marketing aspect of getting getting known first. But one of the things I did is I wrote a letter to introduce myself to potential clients and build. Instead of just handing out my card and going to different office building S, I’d write a letter saying who I am and that was pretty Helpful. Then I was on linked in quite a bit. I was, you know, getting a lot of attention on there and I just started talking to everybody. joined different groups. It was just very active. Obviously in the beginning, Even though I have like a background and you know business background. It took me a while for me to like get confidence. but I had a mentor. Also That was talking to me. I met with them every week. Talk to him Day, You picked up the phone. So any deal that I came across, He and I had questions. I had some somebody directly there, so it kind of gave me confidence to go out, and you know, talk to people and you know, start start developing some business,
Chris Ressa:
Wow, You have a story about a plastic surgeon Mclean, Virginia. But before we go there,
Brian Perry:
M
Chris Ressa:
and how that plastic surgeon ended up there, an interesting story because it’s an owner operator. They owned the building which I’m excited about.
Brian Perry:
Right,
Chris Ressa:
But before we get into that, Tell me what you think about what’s going on in health care real estate today from your vantage point, and and you can bring me down what’s going on More specifically just in the d, M. V and health care real estate house. It’s the market. Like. What are you seeing out there? What’s going on?
Brian Perry:
So specifically in the the D, N B and in the markets. Because I do do some in Maryland and D C. There, Not a lot of people are going directly to D. C. right now. It’s over the past year. I’m getting asked. a lot more of things that are just in the suburbs are linked in Falls Church. Tyson’s Maclaine, This is where people want to be like On the fringe, not quite In D. C. I mean, obviously, I hope that changes, but everybody wants to be around where the population is growing. You know, some renewal I’m doing now is somebody who is partnered with somebody. but now they want to have their own their own office, so there’s always business people even looking to start their own office. Or
Chris Ressa:
But
Brian Perry:
Yeah,
Chris Ressa:
so why? so? why are people? Why are you seeing this pushed to the Berbs versus N. D. C? In your opinion,
Brian Perry:
Well, the development that’s going on is not in N. D. C. So people see Crystal City in our linked in, because Amazon’s going there, and like eight million square feet, So all the developers are multi family everything. It’s going to be like a huge, a huge new development there. So that’s attracting people
Chris Ressa:
Sure,
Brian Perry:
to that area. Titans where I am is a lot of business district. But the populate It’s growing a lot. They’re building income growth, So when people come,
Chris Ressa:
So there’s opportunity. so those are growing. So put simply your opinion, the suburbs are growing. People are coming out of the city. or even if De C’s growing, people are seeing the opportunity in the burbs and that’s where they’re looking to locate businesses.
Brian Perry:
Yeah, I would say. I mean, I mean, Fairfax County is very wealthy, so it’s kind
Chris Ressa:
Sure,
Brian Perry:
of established so, but it keeps moving inching out to where people will be, but even like a false church which is right near where I am. you know they’re doing a ton of development too, so they’re trying to, So those are predominantly, You know, Fifteen miles and into D. C are usually where people Looking.
Chris Ressa:
And what? anything else about the market that you’re finding interesting right now. Some of the things that you’re seeing out there that are pretty consistent about what’s going on as it relates to the health care real estate in the d, M V market.
Brian Perry:
Um. I think. I mean, we’re also seeing Um. just in D. C. In general, they’re finally put something out there about having the government workers kind of come back to downtown. They’ve been gone since the pandemic, So if they go back to pre pandemic, um, prepandemic levels of telle work And all that retail, all that activity will I think start back up again, and that might might be where I have more people saying Hey, I want to go to D. C. Because these multi family, these complexes, they have retail on the bottom and health care loves to go. you know, kind of right underneath, like a dental or a spaw, something like that, So I think that will, and the other market here That’s huge is life Science in Rockville, So Maryland, just because they have the employe potential employees here, it’s you know there, that’s like a major hub for the life science.
Chris Ressa:
Are you anything else about like health care specifically that you’re noticing, and how they’re thinking about real estate. The health care industry
Brian Perry:
Um. In general retail, They, they want to be in the mixed use development and health care will go on like the second floor. Usually, that’s where they’ll put health care. They’ve been willing to pay more in rent than in the past. Um be for service the spas, um, um, plastic surgery, dermetology, Um, I see a lot of that that grow.
Chris Ressa:
Got it well. That would take us into your story. Mentioned plastic surgeon. You have the story about a plastic surgeon in Mc. Clean. And what’s the name of the Plastic Surgeon office?
Brian Perry:
Ah, it’s Dr. Chang. I got to even see What he calls. change his name, Um, Congressional plastic surgery.
Chris Ressa:
So call, we’re going to do that again,
Brian Perry:
Okay,
Chris Ressa:
So hold on one second call. She’s the. She’s the person
Brian Perry:
That’s
Chris Ressa:
who
Brian Perry:
odd,
Chris Ressa:
runs through the editing. Brian Perry. So what’s the name of the plastic surgeon in Mclean?
Brian Perry:
Congressional plastic surgery.
Chris Ressa:
Okay, so walk us through. How did congressional plastic surgery end up in Mc. Lean?
Brian Perry:
So actually they were existing in Mc Lain. Already,
Chris Ressa:
Okay,
Brian Perry:
I had done my normal canvasing and cold cold to get an appointment with him and so we ended up. you know, Bring the rain maker with me with me to the meeting.
Chris Ressa:
What? Just real quick. Why did you call on this specific tenant? Was there a reason? Did you notice something like he was in a bad area of Mc Clain?
Brian Perry:
No,
Chris Ressa:
What was the reason
Brian Perry:
he
Chris Ressa:
you
Brian Perry:
was actually,
Chris Ressa:
call it?
Brian Perry:
I was targeting plastic surgeons on my on my
Chris Ressa:
Okay?
Brian Perry:
reach out, and he was the former president of where I was at. He was actually the leasing person for that building, so he could talk the talk about about that and I think I reached out to the society, the local Society for plastic Surgeons here, but he was willing to take a meeting. I did not think he already had like seven years left on his least that I found out, so like Okay,
Chris Ressa:
He’s not going to be ready to do
Brian Perry:
He’s
Chris Ressa:
something
Brian Perry:
not going to be ready to do something. But after talking to him convincing him to, kind of you know, worked with us and I worked with him for at least a year, maybe a year and a half. Yeah, like a pretty long time and one of the first things we did. I was like. Okay, Well, let’s You know, let’s keep in touch And so we ended up keeping in touch and he’s like Hey, can you look at off market for off market opportunities And here you know that that can be. That’s a bit more difficult, especially price.
Chris Ressa:
Difficult everywhere
Brian Perry:
So I did find one opportunity for him that was near by. But everybody sells for a price and Valuation. everything was like double. He’s like. Well, Yeah, I’ll sell for eleven million, for you know, six million dollar building. I’m like, Okay And then I looked at auction and we actually were in bidding. for. It was a bank location and Mc lain, which was pretty nice. It was like three thousand.
Chris Ressa:
On auction dot com
Brian Perry:
Where is it? The ten x? Or
Chris Ressa:
Ten x,
Brian Perry:
Yeah?
Chris Ressa:
Yeah, yeah, ten x on ten X.
Brian Perry:
So
Chris Ressa:
Okay,
Brian Perry:
On ten x, I believe that’s where I kind of found it. So we had gotten to the second round. where they say
Chris Ressa:
You’re on ten x. Okay
Brian Perry:
we got to the second round. We put the bit and I didn’t feel like he was so locked into it. For whatever reason, I was like you got the parking. It’s about three thousand where the first surgery center. I was. like. this would be good. you have. It’s near your previous office. Um. it was like a good location. Um. But what happened was we put in a bid? We didn’t. We didn’t get that bid, but I found out later that there was all of these M use restrictions on that property and they had a M. A temporary. Um, things were going to expire so that his use probably wouldn’t have worked anyway. There was like a long list of problems with the property, Um, or restrictions ad condos in the back and the back One Like all right, That’s not going to work. but at least I know he was, you know, somewhat serious, and eventually we found out down the street there was a building for sale, but I didn’t want to show it to him because it was like sixteen thousand square feet, but I found out he had gone to Texas. Looked at all those doctors down there with all their the size space they had. so he comes back Here. He’s like, I want you know much larger space. And so I really wasn’t opposed to that and you know good for me, so we ended up doing a deal for building. It was like sixteen thousand square feet. I see what. I.
Chris Ressa:
And the was there a tendant in there? Was there a user in there? Was it vacant?
Brian Perry:
So there was a church user. I don’t know if that’s like this in
Chris Ressa:
Oh
Brian Perry:
the
Chris Ressa:
boy.
Brian Perry:
other places, but in the basement level, it was a nice renovated building, so there was three levels. There’s like a basement and then two floors above. but there was a church person there. I guess using the space a couple of days a week, paying way below market rent. So I really wasn’t counting that, you know, because that’s like Okay, you know, we’ll probably Move them out, But he saw the space and after you saw the space, lots of questions come up with parking elevator, is it And you know what size is it? Are we going to do overnight procedures? and I don’t know about other other markets, But if you try to do overnight here, it’s just it’s really difficult and we can’t get the use permissions Quickly, so as long as he wasn’t doing overnight procedures, they treated just like they treat medical like office here. The requirements, Um, along with the parking, so we had a civil engineer come out to kind of verify the parking, the gross floor how they do the calculations. Then I got a contractor that had built out these facilities to kind of get him comfortable, so I was kind of, and then I had Financial advisors I’m talking to to help them kind of plug into numbers, and eventually we put it at all for got to get the price down a little bit to where you know we could make sense of it, and early on in the process it was like kind of going okay, kind of not going astray Then we got the appraisal, I know I’m kind of skipping ahead like a long time of different things, but we get the appraisal and I know you probably experienced that, but the appraisal was very low for
Chris Ressa:
Yep,
Brian Perry:
what we were doing and I hadn’t had. I had read through because I had another property in false church, so I worked with a certain appraisal. The
Chris Ressa:
So I have
Brian Perry:
Yeah,
Chris Ressa:
a question. I have a question real quick. So a couple of questions. One. just curious for a reference point. At this point, what is he deciding to do with his? The lease he has with seven years of term left
Brian Perry:
He’s He was confident that he would because there is a demand here because
Chris Ressa:
That need to be able to sub
Brian Perry:
he would
Chris Ressa:
lease
Brian Perry:
be
Chris Ressa:
it?
Brian Perry:
able to sub lease it. so I said, If he’s comfortable doing it, you know, then I think it’s kind of realistic, so I was like Okay. Is this going
Chris Ressa:
Okay,
Brian Perry:
to be?
Chris Ressa:
So one? So he’s going to subliseis, existing So to the appraisal comes in low. Is he financing this with mortgage?
Brian Perry:
He is financing. He’s getting a hundred percent financing M from a bank here, so he’s not putting anything down Ye. He’s using a mortgage.
Chris Ressa:
Well, is it is it? So then it’s not a mortgage?
Brian Perry:
Yeah,
Chris Ressa:
It must be like a business loan.
Brian Perry:
yeah, I mean, I used Atlantic Union because they were the one.
Chris Ressa:
Wow, hundred percent financing.
Brian Perry:
They. I mean, there was
Chris Ressa:
What
Brian Perry:
a couple other. I mean, I had known somebody there and I was kind of working with them because they were known to do these kind of deals with doctors, but they,
Chris Ressa:
Got
Brian Perry:
they
Chris Ressa:
it
Brian Perry:
stuck it out because they had a little bit of competition when he was trying to to coal, but they kind of fought off the other competition to win the deal, but yeah,
Chris Ressa:
So okay? So the appraisal comes in love. What happens next?
Brian Perry:
Well, let’s see panic.
Chris Ressa:
Uh
Brian Perry:
So so
Chris Ressa:
huh,
Brian Perry:
initially I was thinking, so one of the things that it came in low was because they were confused about the office for the medical use, the surgery center. I think they had thought because it was unique, because if we’re just buying an office, it would be different, but it’s for medical, so we had to go back in Try to challenge
Chris Ressa:
Defend
Brian Perry:
challenge
Chris Ressa:
your value.
Brian Perry:
Challenge. And and I think I think I did pretty good. I mean, I came back with a kind of an argument about this and this, Though it’s not you know, it’s not overnight. It’s for a medical offise. There’s not a lot available at all, so it’s kind of hard to find the exact cops, because in ticing, this is like the top of the market for the suburbs, in a way for A small medical office building, So to find the rate comps to get the valuation, Um, you know with the seller, of course, I went back to the seller and I said, Hey, you know this came in low. What what do you want to do here? Um, and they said you know, Because we’re not going to pay below appraisal, because he’s also got a million dollars and the build out so that if we don’t get The amount to where it covers everything you know we can’t can’t do the deal. So went through that that radio in the bank agreed to get a second opinion on the appraisal, and I had kind of learned a little bit from the first one. I mean, I wasn’t trying to change anything like. Okay, what do they really need all together to to get the to get to where we need to be? So I kind of just worked through that. Got a new appraiser assigned, Got her everything she needs, Like some of the tenant improvement. I had to get all the things they were doing from like to finish it. They wanted all these details, so that had taken me a while to get from the contractor what I needed, but I mean long story short, I ended up getting the appraisal, But like the day before it was due to like close, we were like running up against the clock, kind of. so at the very last minute I was asking the appraiser to get back. They get back with it and And it ended up going to the finish line on there, But
Chris Ressa:
So Wow,
Brian Perry:
yeah,
Chris Ressa:
and what was the? What was the? What was it originally listed at?
Brian Perry:
It was six. Originally it was seven. I was like that’s way too much. Then they re listed it at six point Three, negotiated it to six point one. From that price.
Chris Ressa:
And the appraisal came in.
Brian Perry:
I don’t know if I’m I don’t want to incriminate myself with the
Chris Ressa:
Uh,
Brian Perry:
banes,
Chris Ressa:
uh,
Brian Perry:
but the appraisal.
Chris Ressa:
Yeah,
Brian Perry:
it’s multiple. hundreds of thousands of dollars. Probably
Chris Ressa:
Less.
Brian Perry:
yeah, I, I think it was like you know, seven hundred K. so I was.
Chris Ressa:
Oh, you got a new appraisal?
Brian Perry:
yeah, yeah,
Chris Ressa:
Got a new appraisal,
Brian Perry:
yeah, yeah,
Chris Ressa:
So new appraisal, Okay,
Brian Perry:
yeah,
Chris Ressa:
And And when did he close?
Brian Perry:
This was. actually, it was last summer. That was when
Chris Ressa:
Wow,
Brian Perry:
they closed,
Chris Ressa:
is he open yet or still under construction?
Brian Perry:
So I don’t know if you know, but the banks are so like watching of everything going on, so I actually have to check, because he had told them to give him eighteen months, kind of to get this built, so I actually have to check with a contractor to see you know how close he is. Initially we were talking more, but he had to do something with the elevator and all these things that that came up, And then he has space He s to lease, So I was going to lease that space for him, but They had to. They had to get his floor done before I could really do anything, but yeah, he should be, should be in this summer. You know, I got O, get the go check in, but I mean it’s going to be good
Chris Ressa:
Got
Brian Perry:
surgery
Chris Ressa:
it?
Brian Perry:
center. You’re goin make more money. It was. it cost a lot to go to the hospital to get time in the hospital. So that’s what kind of drives them to have their own space where they can do their procedures and not pay The the fee they have to pay at the hospital.
Chris Ressa:
Is that how it works? The hospital charges him a fee.
Brian Perry:
Yeah,
Chris Ressa:
Oh, I didn’t know. that’s how it worked.
Brian Perry:
Yeah, they charge. That’s driving them to want to own and then run it out of their facility. Some plastic surgeons kind of get ahead because they want to to do it just after residency, But they need to work for a little bit before they’re going to get this this big health care loan to open up their own their own facilities. So Um, actually, just a few people I got to talk to about that, but yeah, that’s the big driver because It’s a. I mean, but they make they make good money here or so.
Chris Ressa:
Fascinating. well, Brian Perry,
Brian Perry:
Yeah,
Chris Ressa:
this has been great. Were
Brian Perry:
M,
Chris Ressa:
running up on time. I really appreciate it.
Brian Perry:
K,
Chris Ressa:
Thank you so much for sharing a story
Brian Perry:
M,
Chris Ressa:
about an operator who owns their own building. A bit about how the health care financing works, and that little bit at the end about how I had no idea that one of the things driving surgeons to have you know to do surgery out of the hospital is the way it works. Is the Surgin is like essentially renting the space from the hospital for period of time, and they’re charging them a fee for that or
Brian Perry:
Yeah,
Chris Ressa:
her. Had no idea.
Brian Perry:
yeah, yeah,
Chris Ressa:
Well, Brian Perry, this is great. I really appreciate it. Thank you so much,
Brian Perry:
All
Chris Ressa:
man,
Brian Perry:
right, thank you.
Chris Ressa:
So Brian Perry, you gotta stay on for one second.
