Do You Know What Your Veterinary Practice Real Estate is Really Worth? Part 1

Do You Know What Your Veterinary Practice Real Estate is Really Worth?

Part 1- Creating Liquidity and Building Improvements

Written By: Daniel Eisenstadt and Ian Widensky of Calico Real Estate

Thirty years ago nearly every owner of a veterinary practice owned (or wanted to own) the real estate where his or her practice was situated.  While this continues to be the norm for many owners, like so many other aspects of veterinary medicine, “the times they are a changing.”  Today, more practice owners are recognizing that their practice and building are different assets and that viewing each separately can create greater financial value and more flexibility.

In many other healthcare fields (dentistry, physical therapy, etc.) practice owners rarely own their own real estate, choosing instead to focus on building the business of their practices.  Most owners enter into long-term leases for well-equipped facilities in good locations.  In fact, most corporate groups that acquire veterinary practices utilize the same principles and negotiate long-term leases as part of a purchase agreement.

Similarly, certain consultants and advisers have come to view the separation of practice and property as a good way of creating options for owners.  Says Dr. Karen E. Felsted, CPA, MS, CVPM, president of PantheraT Veterinary Management Consulting, “Traditionally, practice owners have sold their real estate when they’ve sold their practice.  This is a good option for some practice owners but not necessarily for all.  An opportunity to cash in on the value built up in the real estate without having to sell the practice gives veterinarians more financial choices and the ability to customize their succession plan to their individual needs.”

Although no situation is alike, there are several scenarios where value can be created by viewing and treating the practice real estate as independent from the practice:

Creating Liquidity

After years of building a successful practice, many owners are content to practice for another decade (or more) and enjoy the stability of owning a healthy business.   But many admit to feeling a financial crunch as their children grow older and head off to college.   Many want to buy a second home or travel more, but feel unable to do so.

Some veterinarians may be concerned that selling the practice real estate separate from the practice may make a future sale of their veterinary practice less attractive.  In fact, as long as a lease is assignable by the practice owner to a future buyer of the practice, the sale of the real estate will not restrict the sale of the practice.  And, though some associates may be interested in buying real estate few associates and no corporate buyers will pass up the chance to buy a good practice because the facility is leased.

For most veterinarians their practice represents their largest financial asset.  But without selling the practice, many see no easy way to create liquidity.  Some veterinarians in this situation work harder to meet their increased personal financial needs while others put off personal needs and/or the responsible preparations for retirement.  For these veterinarians, a sale of their real estate to a landlord that will lease the property back to the practice can be a creative solution to address this financial need.

Building Improvements

After years in the same building, many practice owners recognize the value (or the impending need)  of renovating and/or expanding their physical plant.  But many of those same owners choose to defer these large-scale projects for financial reasons or because they don’t want to take on additional debt late in their careers.  Regrettably, the decision not to renovate can compromise their ability to recruit quality associates or future buyers, detract from the customer and patient experience, and  lead to a deterioration in the practice’s value.  Few consider the option of selling their building to a landlord who will invest and manage a renovation project and integrate these costs over the course of a long-term lease.

Coming Soon: Part 2 of “Do You Know What Your Practice Real Estate Is Really Worth?”- Diversification and Maximizing Value. 


CVP Welcomes Two New Hospitals To Our Family!

Community Veterinary Partners is growing our family once again! We’re thrilled to welcome Chippens Hill Veterinary Hospital and Liverpool Animal Health Center. CVP now has 11 veterinary hospitals spanning five states.

Liverpool Animal Health Center

Located just outside Syracuse, N.Y., Liverpool is fully accredited by the American Animal Hospital Association and the New York State Veterinary Medical Society.

The practice was founded in 1960 and moved to its current location on Oswego Road in 1988, the same year co-owner Dr. David Clegg joined the hospital staff.  Dr. Clegg was the sole owner since 2005.  The practice has five exam rooms and employs six veterinarians and 22 dedicated support staff.  The facility also has non-medical kennel capacity of about 35 animals. Services include complete dental care, soft-tissue surgery, radiology (dental and digital), laser therapy, ultrasound and hospice care.

“We are very excited about partnering with CVP and look at it as an opportunity for the practice and staff as well as CVP to benefit from the relationship.  The partnership will allow us to further develop the medical, dental and surgical care and services we provide for our clients and their pets with CVP focusing on the day to day administrative responsibilities for the hospital,” said Dr. Clegg. “They have given me the opportunity to refocus on what I love to do.  I feel this will be a great win-win situation allowing Liverpool Animal Health Center to help serve our local community with outstanding veterinary care in the future.”

Chippens Hill Veterinary Hospital

Chippens Hill takes care of dogs, cats and exotics for clients in the Bristol, Conn., community. Dr. Larry Linnetz founded the hospital in 1976 and ran it for the next 31 years. His son, Dr. Eric Linnetz, grew up in the practice and eventually took over for his dad in 2007. Together, both father and son practice today, along with a lead veterinarian and two associate veterinarians.

“Chippens Hill has always emphasized high quality patient care and client service in a professional yet family friendly setting,” said Dr. Eric Linnetz, co-owner of Chippens Hill. “What appealed to me most about CVP were the similarities in their approach to their partner hospital relationships. CVP is a relatively small, familiar group with an inclusive philosophy to management. It just felt like the perfect fit.”

Dr. Emily Elliot leads the day-to-day clinical activities at Chippens Hill. She joined the staff in 1997 after graduating from the University of Pennsylvania School of Veterinary Medicine.

“Having just marked the first anniversary of Chippens Hill joining the fleet of CVP hospitals, I can attest to their sound financial management in support of medical freedom,” said Dr. Elliot, lead veterinarian at Chippens Hill. “In fact, the increased purchasing power and improved staff benefits, make practicing quality medicine more affordable and even competitive with internet pharmacies. We are able to maintain our family-friendly service and help our clients be able to buy locally from us.”


Join us tonight at ACVC: New Threats, Challenges and Opportunities for Today’s Veterinary Practice

Join us tonight at 7 p.m. at the Atlantic Coast Veterinary Conference for dinner and an interactive discussion of the business threats facing the veterinary industry.

Join us and our panelists, Dr. Karen Felsted, of PantheraT Veterinary Management Consulting, and Gary Glassman, of Burzenski & Co., as they discuss “The Business of Veterinary Medicine: New Threats, Challenges and Opportunities for Today’s Veterinary Practice.”

The dinner is being held at McCormick & Schmick’s, located at 777 Harrah’s Blvd, Atlantic City. Boehringer Ingelheim and Patterson Veterinary are co-sponsoring the dinner.

Here is the full invitation: Calico Group_Invite.


Community Veterinary Partners is Hosting a Free Practice Leadership Workshops on November 8th and 9th 2014.

Community Veterinary Partners is hosting a free two-day summit in November aimed at building leadership skills for veterinary hospital owners and key staff members.

Day 1, scheduled for November 8, is aimed at DVMs and VMDs and key support staff. This will introduce some of the key leadership dynamics in the workplace including hospital culture, emotional intelligence, situational leadership, and creating accountability in the workplace.  Designed for doctors and support staff in supervisory roles, this workshop will focus on developing employees into everyday leaders.

Day 2, scheduled for November 9, is more appropriate for owners and senior management staff, including practice and office managers. This year’s program theme is “Cultivating the Future Leaders in Our Practice (Because I don’t want to do this job forever).”

Dr. Wendy Hauser is a former owner of Coal Creek Veterinary Hospital, a 2011 AAHA Hospital of the Year finalist. She has been an associate, an owner and successfully sold her practice, becoming managing DVM of Coal Creek until she left in 2013. Dr. Hauser is a board member of the American Animal Hospital Association, and she participates in various speaking and training sessions across the country.

The workshops are free for hospital owners and staff in good standing with Pennsylvania Veterinary Medical Association or the Delaware Valley Academy of Veterinary Medicine.

The event will be held at Seasons 52 Restaurant in King of Prussia, Pa. Space is limited for this event so please register your team members by emailing travis.meredith@cvpco.com. For more information, click HERE for an informational flyer.


Animal Hospital of Dauphin County Kicks Off Educational Campaign For Referral Services

The Animal Hospital of Dauphin County, a CVP family hospital, kicked off an educational campaign for its growing suite of referral services last week at an event with the Pennsylvania Veterinary Medical Association.

More than 50 local veterinarians and technicians attended the continuing education event, held at the Hollywood Casino in Grantville, PA. AHDC showcased the new referral services now available at the hospital, based in Hershey, PA.

Dr. Jason Tomes spoke about ultrasounds, Dr. AJ Cooley discussed orthopedic and soft-tissue surgery, and Dr. Jonathon Goodwin detailed his work in cardiology.

“Years ago local veterinarians and their clients had to travel several hours to benefit from comprehensive referral services professionals,” said Dr. Bob Sarsfield, AHDC co-owner and medical director. “The leadership at AHDC recognized the need for these services on a local level and we are excited to be able to offer these services to our colleagues, their clients, and their patients throughout south central Pennsylvania.”

The event also served as one of PVMA’s District 6 Dinner Meetings.  The event was made possible through the generous sponsorships of Calico Group, Hills Pet Nutrition, and Zoetis.

PVMA’s Executive Director, Charlene Wandzilak, provided an update of PVMA activities in the areas of continuing education, advocacy, and practice management.  “We are very pleased to be able to promote this mission by partnering with our friends at AHDC and their Referral Services Team,” Wandzilak said. “Events like this are key to furthering our role as an effective resource to PVMA’s more than 1,900 members throughout Pennsylvania.”

To learn more about the Animal Hospital of Dauphin County, visit: www.ahdcvets.com

To learn more about the AHDC Referral Services Team, visit www.ahdcvets.com/care/referral-services/

To learn more about the Pennsylvania Veterinary Medical Association visit their webpage www.pavma.org

Calico Group (www.calicogrp.com) provides loans to veterinarians and also purchases and leases back real estate from veterinarians.

 


Have You Seen our New Video?

We’re excited about the new video we put together showing what it’s like to work with Community Veterinary Partners. We’re showcasing it right now on our home page, so check it out. (You can also see it at the bottom of this post.)

The video includes interviews with Dr. Bob Sarsfield, our partner-owner at the Animal Hospital of Dauphin County. There’s also commentary by our president, Daniel Eisenstadt, who talks about the kind of partners we’re looking for, and why it’s so important to have a succession plan in place.


Our Hospitals (and we) are Hiring

We have several openings for veterinarians, technicians and (at CVP) a senior accountant.

Check out our employment page for more details.


Karissa’s Sustainable Wildlife Habitat

My neighbor has big ambitions. Ivy league college. Successful business career. Designing and building a National Wildlife Habitat. And she is only 15. Karissa Wenk is a Baldwin High School student and one of Izzy’s (my four-year old Portuguese Water Dog) favorite people. Well, the truth is that Karissa’s Golden Retriever, Holly, is Izzy’s closest friend. Continue reading…


Good news from the Animal Hospital of Dauphin County

There’s been a bunch of good news coming out of the Animal Hospital of Dauphin County recently.

Two stories have a similar theme: one-eyed cats. First, there’s the black kitten named Melissa that came into our hospital with a severe head trauma — damaged right eye and a broken skull. Dr. Jim Kepner did amazing work here. Continue reading…


A Web Site for the Animal Hospital of Dauphin County

We made our first investment earlier this year in the Animal Hospital of Dauphin County, a five-doctor practice located in Harrisburg, Pa. Since then we’ve been working hard to optimize the business operations. We took over the back-office headaches from Dr. Jim Kepner — the bill paying, the payroll, the HR management and more — and have been looking for ways to improve the marketing of the hospital. Continue reading…