The Practice of Therapy

Gordon Brewer: Well, hello everyone. And welcome again to the podcast. And I'm really excited to get to hear from Colin Carr on this episode. And we're going to be talking about real estate and our offices and all the things around that. Welcome Colin.
Colin Carr: Thanks for having me. I appreciate it.
Gordon Brewer: Yes. So as I start with everyone, why don't you tell folks a little more about yourself and how you've landed where you've landed?
Colin Carr: Absolutely. So I've been doing real estate now for, almost 24 years. I took a little bit of a unconventional route right out of high school. I didn't know what I wanted to do professionally. So I started working right away. I met a gentleman that owned a bunch of apartment complexes and just started, you know, interning or shadowing for him.
And that was my, my entrance into real estate. So I did, property management, multifamily for, you know, three or four years. I got a brokerage in my early twenties and started doing work for companies like Walmart, Wendy's, Blockbuster, large national retailers, and had a desire to start doing more often industrial work where I was working with like individual business owners versus large corporations.
And over a period of time, I stumbled across a couple of healthcare transactions and really enjoyed working with healthcare providers. And the summary as far as how I got to start this company, which we have today called CAR, which is exclusively representing health care providers. So it's commercial real estate, health care only, we're only on the tenant and buyer side, so the doctor side of the transaction, but the way that I got into that, that, that niche, if you will, is I was doing a lot of health care real estate, but I was working for a significant amount of large institutional landlords.
And I had a number of transactions where these landlords were just in such a superior position to the doctors and the doctors just got absolutely crushed in a handful of negotiations that I was on the landlord side of. And I watched a couple of healthcare providers lose literally like 300, In deals where they were overpaying they were missing, you know The opportunities to reset like base share expenses or operating costs to have them go down significantly They were not negotiating the concessions like free rent bill that allowance all these other, you know Things that are available in a deal and so I had a number of transactions that happened over a very short period of time where literally the landlords walked away with with hundreds of thousands of dollars more than they should have and what we would have called a fair or market transaction.
And just for me, the light bulb came on and said, look, you know, these guys are, they're great people, they care about their communities, they care about their patients, their staff, they're doing the best they can with what they have. But they're completely out of their realm going up against professional landlords.
And so I started doing a lot more tenant and buyer work in the healthcare space. And after a short period of time, I realized there was an entire opportunity there just to help the doctors and the practice owners capitalize. So I launched this company at the beginning of 09. And today we are, 15 plus years in, we're licensed in all 50 states.
We work coast to coast. And as of this recording, we have over, over 5, 000 clients that we're doing work for, in some capacity with their office space or their real estate for their space.
Gordon Brewer: Wow. Wow. That's, that's so cool. And I think, probably a lot of people, in, in this space are, don't haven't really known that there were companies like yours that existed just to negotiate all of this stuff.
So I guess maybe a place to start, just kind of knowing the audience, what are some of the basics we need to think about in terms of, you know, looking for office space or negotiating a lease, all of that kind of thing. I know that's a huge
Colin Carr: topic. Yeah. No, it's a great question though. So let me just start with the fundamentals of commercial real estate.
And this is really any form of real estate, but it's maybe a little bit less understood in commercial real estate. It's important to realize that a lot of these commercial properties, even some of the smaller ones, these are expensive buildings and you don't get to the place where you can purchase these types of buildings as an investor or landlord without being well capitalized, without being sophisticated.
And so that person typically is a professional investor or a professional landlord, or they're, they're very savvy of nothing else. Their objective is to make as much money as possible. And there's no MSRP, like there's no suggested retail price or manufacturer's price of what stuff gets sold for, like, you know, you look at buying certain types of products or commodities and there's like a national price, or there's a.
You know, if you were going to buy a Ford F 150, like Ford says, like, here's what you should sell it for with these finishes. There's, there's no price, like, cap or, or, or margin in real estate that's considered fair. It's whatever the landlords want to do. And so, health care providers, practice owners, business owners go into these deals and they think that, well, Even if I don't get a great deal, it'll still be good enough.
And that's, that's completely wrong. Like you can lose a couple hundred thousand dollars on a transaction, even on a five year lease, let alone a seven or a 10 or a 12 year lease. which a lot of commercial real estate transactions are. So I think the first thing to understand is there's a lot of money on the line and landlords want as much of that as possible.
They don't care if you overpay by a half million dollars, like they're not going to feel bad about that. Just like if you were in a boxing match, like the opponent's not going to feel bad if you get knocked out in the first five seconds, like they don't have any obligation to make you feel good about yourself or to make you feel like you did a good job.
And it's the same thing on residential. Like you go to sell your house, we've seen this for the last four or five years at an unprecedented level, like houses are selling for like 50, 70, 80 percent more than they were purchased for a couple of years ago. Nobody feels bad about that. Everyone's like, Hey, look, if someone's willing to pay this for my house, I'll take it, even if I know for a fact, it's not worth it.
Landlords look at real estate the same way. They want the highest return. They want to give you the least amount of concessions They want to they want the most control over the legal terminology to put you in the most Narrow place possible so you have the least amount of options or rights And the event something doesn't go right and they have no qualms about that So I think that the fundamentals of commercial real estate need to be laid out as this There's a lot of money on the line You can lose a couple hundred thousand dollars very quickly or you can also capture it with the right strategy there's a lot of areas to get into complications and pitfalls to not only just the financial but the business terms the non economic terms and just realize you're going up against professionals Like, and there's a lot of landlords that love to pretend like they're just like, just the average Joe out there, just, you know, want to make a fair deal, you know, just think they might come off as just kind of being, you know, salt of the earth or kind of dopey or whatever.
They know exactly what they're doing. Like, they're, they're very intentional with their strategy. They're, they're networking and consulting with professional listing brokers if they're not using one. They're still, they're still talking to them behind the scenes. And so I think the, the rules of engagement are you don't want to get knocked out in a transaction.
We use a boxing analogy, whether you like boxing or not, you can pick up on it. Like nobody wants to get in the ring and knocked out. Like you want to hold your own. And most, most practice owners are not capable of holding their own against landlords. They just, they're in an inferior position to start with because the landlord owns the property and has control over the transaction.
And so you just want to make sure that you play a representation, you have a strategy, you treat it with the respect that it's due.
Gordon Brewer: Yes, yes. So, so one, one question that comes up when you speak of strategy, tell us, tell us a little more about kind of what that encompasses. I mean, as far as the strategy.
Colin Carr: Yeah, that's a great question too. So when it comes to strategy, The landlords are sizing up everyone that contacts them. And when I talk about landlords, they're, they're probably working through a property manager or a listing broker, an agent, but you know, that side of the transaction is sizing up who's showing up when a healthcare provider shows up without representation, they're going to assume that person doesn't know what they're doing.
They're going to assume they're capable of getting a deal done and signing a lease, but they're going to assume they're not savvy because if they were savvy, they'd be showing up with representation. If Chipotle looks at a retail center or Starbucks looks at a retail space, those are, those are first class retailers.
They're not just gonna have some random person. They're going to have their real estate agent doing the work for them. If it was a large office user, if it was like a Lockheed Martin or a Charles Schwab, like they're going to have a professional helping them. And so landlords are accustomed to working through people that are sophisticated and when someone shows up, who's not sophisticated, In real estate who maybe he's only done a deal or two in their career Maybe they've done a few deals, but it still doesn't make them a professional in that They're going to realize that they don't have a real strategy.
So that's one aspect is representation. The next aspect is You know, what do those companies do those companies go to market they look at all the top options They narrow down to the top. Let's say maybe five six seven properties. They tour those properties They look at them in detail and then they negotiate on three or four properties Simultaneously, and this is a difference of commercial real estate versus residential real estate in residential real estate You know, you look at houses online You you work with an agent you tour properties And when you find that property that house you like you submit an offer and it's usually in a contract form That if the seller says yes, I like this offer.
They sign it you're in a binding contract. And so it's a It's not like a non binding offer. It's a binding offer And commercial real estate you negotiate in a non binding format what's called a letter of intent Or you can put together a request for a proposal It's very common to have three or four landlords going back and forth.
It's very common to go three or four rounds of negotiations, and that's just a different game plan or a different strategy than in residential. And so I might say, well, why would you take all the time and effort to do that? And there's a couple reasons. Number one, Landlords are going to be a lot more competitive if they think that you are, are really playing the market and you're not going to be taken advantage of.
If a landlord thinks that you're only negotiating on one property, and you don't know what you're doing already, and you're not able to talk about what other landlords are offering, Why would a landlord negotiate against themselves? There's no one else in the negotiation like you're there, but there's no one they're competing with and so There's no motivation for a landlord to get really aggressive when they know that other landlords are vying for the deal It changes the way they approach it.
They realize they can't They can't comment you with But with ridiculous terms or with egregious language, like they have to be a lot more intentional with how they position themselves. Otherwise, they're going to get kicked out of the game very quickly. Yeah. So, you know, the representation, the strategy, et cetera, those are probably the top two things that I would say, change the strategy or change the entire opportunity for you.
And the beauty of that is if you're a healthcare provider. You're not you're not having to control the process like you're fully in control as far as saying yes or no But you're not setting the tempo the pace. You're not dealing with the questions. You're not worried about answering incorrectly It's like having an attorney in court or having a a good cpa during an audit Like you don't have to worry about am I messing up by saying the wrong thing?
You've got a pro that's handling it for you And that just puts you into a place of it gives you peace. It gives you peace of mind in the process You
Gordon Brewer: Right, right. Yeah. And what what I'm thinking about as you're describing this is that you really the strategy is you want to kind of turn it so that instead of you courting the landlord, the landlord is courting you, to, to, to give you a good deal on the property because they know that you're looking at several others and you're going to choose the best deal.
Colin Carr: Yeah, that's a great way to say it. And that's exactly right. It's, you know, in the scenario where it's just you and one landlord, I mean, anytime you're asking for something different, you're really just begging the landlord, like, well, would you please give me a lower lease rate or would you please give me more money?
And the landlords don't answer this way, but the answer is why would I do anything for you that I don't have to do? Like, I mean, if you showed up at a car dealership and said, I have to leave today with that vehicle right there, that's the only vehicle I'm looking at. I have no other options. And I don't know what I'm doing.
And you just fully disclosed that and said, what's the best deal you can give me on that vehicle right there. There's no reason for them to do anything besides the bare minimum they need to do to get the deal done.
Gordon Brewer: And so a lot
Colin Carr: of times in that scenario, they'll give you maybe a month of free rent, or they'll give you a little bit of money.
And you think, all right, well, I got the landlord to move off their offer. They came down a little bit. They gave me some free rent or some allowance to build out. And you feel like you captured like some serious concessions. But what you don't realize they just baked that into their first offer And you left 100 200 300 grand on the table So landlords are notorious for making you think that you did a decent job or you did a pretty good job Or you should be proud of yourself And they'll again they'll put on a broadway performance And say things like i've never done this before man.
You really know what you're doing or like They will say things that are just comical And the practice owners will bite off on it all the time. I joke. It's You You know, my son's 15 and a half now. He's, he's pretty strong young man. But when, when he was four years old, we'd wrestle somehow magically, you know, he would beat me.
Okay. Four year old who weighs 50 pounds beating dad, he weighs 200. And he'd go and tell his mom, he beat me in wrestling. Like, Yeah, there's, there's a lot going on there, but a lot of healthcare practice owners are going home and like telling their spouse or telling their friends, you know, man, I did a great job.
This is what I got the landlord to do. And the landlord is, is the, you know, the dad in the background that outweighs them by, by 200 pounds or 150 pounds being like, man, you should have seen the guy that just signed the lease at my property.
Gordon Brewer: Right. Right. Yeah. Yeah, that makes sense. So, to change gears just a little bit, I know what, you know, just, and as I shared with you, Colin, before we, started recording, I'm in the process of looking at expanding my practice right now and starting to look at spaces and that kind of thing.
And I guess it could vary from different parts of the country, but it seems like that there is a lot of office space available since COVID. And so what are your thoughts on all of that?
Colin Carr: Yeah, that's a, that's a great point. So, you know, real estate as a whole is broken into predominantly it's residential, commercial, You can get into other areas like agriculture or farmland, something like that.
But let's just say we're, we're breaking down into residential and commercial. And then once you get inside a commercial, you've got different product types. So you got traditional office space, like you're referencing, you've got retail space, like where you'd see a Chipotle or a Starbucks or a retailer, you've got industrial space where, you know, it could be there, you know, manufacturing a widget in there, or they're, they're using it to store stuff and ship stuff out.
You've got multifamily apartment complexes. There's all these different, you know, sub markets of, or subsects of real estate. The office space is the sub market. Of commercial real estate that has been hit the hardest by far And the reason being is a lot of large companies were forced to send their workforce home And they realize you know what we can function pretty well people are self sufficient We can still track their progress like we know if they're working or not based upon their productivity And we probably don't need to have people commuting five days a week and having all these other inefficiencies that that occur when you've got, you know, large office spaces and so forth.
And so a lot of those companies said, look, let's just get rid of our office space, or let's go from maybe like a large space down to a couple thousand square feet. And then people can come in maybe once a week to connect, or, you know, we can do a staggered schedule, maybe you're in the office two days a week versus five, and a lot of people realize, I don't need office space, I need a lot less office space, I need less locations, and so that's created a significant amount of vacancy in the traditional office space, you know, market, and so those landlords are right now the ones that are, are getting hurt in a lot of scenarios.
There's always going to be a sub market or an area of town where it's more desirable. There's always going to be, you know, the kind of the upgrading concept of I was in a class B, now I'm going to class A. So the best of the best properties are still doing very well, but like the average, the class B or the below average that needs some help or some, some work to upgrade those buildings.
Those are the places right now where there's a lot of opportunity. And so more concessions, lower lease rates, higher build out allowances, you're seeing landlords that are getting a lot more competitive to make those deals because they've got to get the occupancy. You know, when the building sits vacant or space that's vacant, they're not only not making money, most of those landlords are leveraged and have a mortgage.
And so they're going negative every month, but they all have, they still have all the operating expenses. So just like if you own a house that was vacant, you still have to pay the property taxes. You still have utilities. You might still have an like an HOA fee. There's all these costs that go into running an office property.
And so even if there's no mortgage on the property, owner free and clear, which is very rare, You know, it's a vacant space could still cost the landlord thousands of dollars per month, so they're getting a lot more motivated to make deals happen. Whereas on the retail side, there are more franchise concepts, more quick serve, fast food, health and wellness, creative ideas.
There's more retail. Franchises and more retail companies going to market right now than we've ever seen in the history of the world. So there's, there's, there's a lot more activity in retail, industrials on fire, multifamilies on fire. Whereas office space, that's where the huge opportunity is right now.
Gordon Brewer: Well, that's that that's encouraging. And I think you know, I think one of the things just in our profession, you know, most of us had little or no training in the business side of things. And in particular, I know of very little people, very few people that know anything about doing real estate deals or do you have negotiating office space and that sort of thing.
So I think, you, you bring up a really good point, which is, People have heard them from me on this podcast before the importance of being able to Not bootstrap it too much, but learn to outsource and find other people that can do What needs to be done? That knows knows what they're doing. Yeah rather than trying to figure it out on your own I know yeah, i've learned i've learned from my mistakes in that Several times over
Colin Carr: absolutely, you know people will ask the question, you know, well, why would somebody not hire a professional?
In any area like let's go beyond real so let's go to a consultant or Let's go to marketing or or an attorney or cpa And and for for me, it's really boiled down to i've come up with like three main reasons and i'm sure there's more than this But i've got three Number one is they don't know who to call.
Like they just, they don't know who specializes. They don't know who to trust. You know, they, they maybe search something and they get too many options and they just say, Hey, I don't want to do this. I'm confused. So they don't know who to call or there's too many options or they don't have any options, whatever have you.
That's just it's an issue. The second part is it's all about cost Like hey, I don't have the money to do this I don't have the money to hire a consultant or to do a a marketing campaign or to pay for seo or whatever it is So there's the financial aspect and then the third one is they feel like they're going to lose control If they bring in someone else and they they're they're they're concerned or scared or fearful Of making a mistake or someone else making a mistake for them And And so they try to lock onto if I do it myself, even if it's not done perfectly, at least I'll know how it's done.
And when it comes to real estate, all three of those are really bad ideas for a couple of reasons. Number one, there's great people out there and you can find them by asking very specific questions to them. You can find them online. You can find them by talking to other people that you trust. And so there are good resources that can be quickly.
If you understand how to approach it. Number two, there is no cost or there should not be a cost for you hiring a real estate agent or broker if you're operating as a buyer or tenant. Commissions in commercial real estate are paid for by the landlord or seller just like they are in residential real estate paid by the seller.
If you went to buy a house and you hired a broker, it is extremely rare to have to pay a buyer's agent a commission. The vast majority of deals have a, have a seller, they hire an agent to list the property and they have a commission that's built for two people. If you're buying a house and you show up without a broker, the listing agent just gets a double commission.
Like you didn't save it, you didn't save a dollar of money and you forfeited the And you probably wasted a lot of time energy. So commercial real estate, same thing. Landlords pay commissions. They build it into the deal. You show up without a broker. The listing broker gets a double commission or the landlord will just simply keep that money.
So there should be no cost to you. And then the third part. Is you're not giving up control. You're actually gaining more control over the process. No one's signing a contract for you. No one's forcing you to do a deal. They're going to give you information you didn't have. They're going to introduce you to other people that you need to have on your team to have a more successful transaction.
They're going to arm you with market intelligence to where you're not wondering if it's a good deal. And in the example of like going to market, And having your broker research every property that meets your criteria, narrowing down to the top, like let's say maybe five, six, seven properties, you tour those, and then choosing three or four properties to negotiate on, and maybe going three or four rounds of negotiations on those properties, You're not going to wonder if you're getting a good deal.
You're not going to wonder if you have seen the right properties, like it eliminates the confusion. I mean, this would be like hiring someone who goes out to seven car dealerships and gets the exact car you want with the exact features. Negotiates with those dealers for you and then brings you the final terms Like you're not going to wonder if you're overpaying at this dealership versus that I mean It's a foolproof game plan To get you the peace of a mind the peace of mind and the intelligence you need to decide what to do And again, not only are you going to capitalize on better terms But I, I'm using the same terminology, that peace of mind is invaluable.
Like nobody wants to sign a five, seven or 10 year contract where they're fully locked in and then realize later they lost 300 grand doing it. Right. Like that peace of mind is invaluable. And that's, that's ultimately what you get when you bring in a professional. Same thing for CPA, same thing for attorney, same thing for the pros.
Like it just, it gives you that confidence that you're doing the best you can with what you have.
Gordon Brewer: Right, right. Yeah. And I think, you know one of the things that I think a lot of just knowing that are this the audience for this product podcast, one of the things that I think a lot of people struggle with is really thinking about the money they spend in terms of it being an investment rather than just money that is lost.
And so it's a, you know, it's pretty, pretty simple math. If I, if I gave you Colin, I gave you 200 bucks and you brought me back a thousand, that's a no brainer. So I mean, yeah, so it's same, same concept. And I think that's important for people to remember.
Colin Carr: Yeah, no, it really is. I mean I I do get the idea There are some things like look if you want to vacuum the the the living room yourself versus paying someone You can save money doing it and you might say hey, I like vacuuming and i'm comfortable vacuuming and that's great It's that's not how real estate works though.
Like that's Like that's not how it works. Like you can file your own taxes, but as a business owner If you don't have a CPA who's, who's tracking all of the new tax laws, cause the tax laws change literally every year, the forms change every year. There's always things that are happening that are going before Congress or the Senate.
Like there's a, there's a huge tax bill right now that affects anyone who owns a business that is in front of the Senate right now that the house already passed. It's like, you've got to know that stuff. And if you're just guessing yourself on, you know, some online software program, like you're probably not capitalizing.
You're probably. You might be saving a couple thousand dollars on a tax bill, but you just lost tens of thousands in additional write offs or deductions, and it's the same thing with real estate. So anybody can sign a lease. Anybody can call on a property. Anybody can search online. That's not the strategy though, and that's not where the real value is presented to the client.
Gordon Brewer: Right, right. Yeah. That's great. Great words of wisdom here with all of this. Well, Colin, I've got to be respectful of your time and I'm I'm sure I'll probably get you back on the podcast to talk some more about this cause there's, I'm sure so much more to cover around this whole topic, but tell folks how they can get in touch with you and if they want to connect and talk about all this with you.
Colin Carr: Yeah, I appreciate that. So the best way to get in touch with our company is our website and it's car. us. C a r r dot u s We've got we've got expert advisors and agents coast to coast so you can click to find an agent in your area And a lot of people, you know might hear this and they say well I'm, maybe three years into a five year lease or I just signed a 10 year lease You can still pick up the phone and call us or send an email.
We'll do a, we'll do a lease evaluation for you. We'll tell you if you did a good job, an average job or a bad job on your last lease, we'll tell you if there's options to purchase in your area and how they compare to leasing, but we're more than happy to have a conversation. You know well in advance so that you have some realm of information or that that peace of mind of hey Listen, here's where i'm at currently And here's the right timeline for my next transaction.
That's a big one, too People miss the right timeline start too early start too late So if you want to find someone in your area, we're happy to connect you with them and then also we do have a lot of resources too. So if you do Want to get more educated so not to control the process, but just so that you're you're better equipped for your next transaction We've got a tremendous resources tab that has literally hundreds of faqs Glossary videos articles.
So if you want to get more information on commercial real estate and how you can leverage it for your practice We've got a lot of really great options for you as well.
Gordon Brewer: All right. Awesome. And we'll have links here in the show notes and the show summary for folks to get to it, easily. Well, Colin, thanks again for being on the podcast.