los_alamitos_medical_pavili
CLIENT Representation of 10 Physicians
LOCATION Los Alamitos Medical Center, CA
SERVICES Tenant Representation
Buyer Representation
Investment analysis and modeling
Property budget analysis
PROPERTY SIZE 66,000 SF Class “A” Medical Office
FINANCIAL BREAKDOWN $278,300 Savings to a Group of 10 Physicians

RELATIONSHIP OVERVIEW

Based on Damian McKinney’s long standing personal and business relationship with two physicians at the Los Alamitos Medical Center, McKinney Advisory Group was engaged to advise numerous physicians on a leased investment in a medical office building development proposed for the center. The doctors had been approached by a developer who arranged with the hospital to build a new medical office building and sought McKinney’s counsel on the proposed lease and investment transactions.

 

CHALLENGE PRESENTED

Based on McKinney’s extensive experience with real estate investments, we believed that the returns offered to the doctor-investors were too low—and the project’s costs and operating expenses were too high—to recommend they proceed, unless the numbers were improved. However, the developer would not vary their offered terms for just two doctors.

 

SOLUTIONS

Damian McKinney and Client Advisor Andrew Meyers conducted group presentations to several of the local doctors, pointing out that if their efforts were coordinated through our representation, then the group had enough weight to command superior terms than doctors could negotiate separately. By banding together a group of ten doctors who collectively would commit to a significant portion of the future building, we engineered what we call a “class-action representation.” With a group of that size at the table, the developer agreed to negotiate.

Upon scouring the property’s financial projections, we negotiated a higher profit-sharing split for our doctor-investors resulting in projected additional income to the group of approx $99,400. Upon negotiating down the property’s operating expenses to be paid by the doctors, we saved our clients approx $278,300 in costs over the term.

In addition to saving the doctors money, we saved them a substantial amount of something that is of high value to them:  time.
To accommodate their busy schedules, we met doctors on evenings, weekends, and lunch hours, in locations ranging from hospital cafeterias to their homes.

McKinney’s compensation came from the property owner, so the many benefits we brought our clients cost them nothing.