Real estate tips for your Chiropractic Practice

Hi everyone, thank you for joining us for another episode of Catch up with ChiroTouch, our podcast series where we talk about the state of the chiropractic profession, best practices and recommendations to manage and grow your practice, and share expert advice with a variety of guest speakers. I'm one of your hosts, Dr. Brian Blask. I'm an account executive with ChiroTouch, where I consult with chiropractors to determine which software solution is best for them.

We have Dr. Elaina Pirro-Lombardi with us today to talk about real estate tips for your chiropractic practice. Dr. Pirro is a licensed real estate agent specializing in commercial real estate in New York, and also has built a successful chiropractic practice on a busy medical campus in upstate New York. She is the perfect person to have this conversation with considering her experience and expertise not only as a practice owner, but also as a real estate agent.

Great to have you today, Dr. Pirro. How are you?

I'm great. Thanks, Brian.

This is going to be fun because you do have that dual licensure when it comes to a real estate agent and a chiropractor in New York, when we want to start talking about tips for chiropractors to think about space and real estate. So this I thought would be a perfect time to chat with you. So can you tell us a little or at least a little bit more about what you do on the real estate side?

Sure. So I've always had an interest in real estate, and if I wasn't a chiropractor, I think I would have gotten into just straight real estate. Currently, I'm a licensed real estate agent in New York, and I work with Pyramid Brokerage Company, which is one of the larger commercial agencies in upstate New York.

I've been fortunate enough to be with them and learn a different side of real estate as the representative verse being the tenant. Because in my chiropractic practice, I'm the tenant, and so I learned a lot being the tenant. However, I wish I had some of the knowledge that I have now as I was negotiating my lease, as I was looking for locations, and things of that nature because I have learned a ton.

I hope that today by the end of this chat, I will be able to impart some added wisdom to your listeners.

Yeah, well, so what are some of those tips that you can share? Say, if you're a chiropractor that's looking for space.

The number one thing in real estate is location, location, location. I'm certain that people have heard that before, but it is the truth. If you would like visibility, then you don't want to be on a back road in the middle of wherever.

And certainly, you pay a premium for location, and I can use myself and my current practice as an example. We pay substantially more, probably per square foot because we're on a medical campus and because it's medical space. But our exposure to other providers and to other patients that would not maybe normally seek chiropractic care, it's opened up our doors to a subset of marketing that may not have been accessible without the location.

So certainly, location is key. And then learning the market. And a commercial agent is really probably your best resource for that.

And someone who focuses more on professional office type space, if that's the direction you're going for. And certainly, everyone has different ideas of what they want their practice to look like. So you want to align yourself with an agent or an agency that reflects that.

So certainly, I do more medical office based on my background and because it's something I like to do. So some of the listings that I currently have are focused in that. So part of it is figuring out, okay, how do I want to present myself?

And by learning the market, it gives you the tools financially to say, oh, okay, so if I'm going to be in this space, what's it going to cost me? Because being in practice is a business. And if you don't have some sense of what the market bears and what you could be paying or what you should be paying, you can oftentimes get yourself into a situation where you're overpaying and or there's caveats to your lease that you may not understand.

Or if you're buying, there's caveats to the property that end up costing you more. It's just like buying a car or leasing a car. You want to look at all your options and a lot of times agents are one of the best resources out there and they don't cost you anything because they're paid when the deal is made and they're paid by the landlord if you lease or they're paid by the seller if you're buying.

So it's a great resource.

What's the best way for a chiropractor to find an agent like you?

It's interesting. I recently worked with a dentist and it came from a referral from someone I knew that I worked with in the chiropractic profession and they were looking for a professional office. And I would say like any other professional, not only yes, read some of the reviews and use your typical, the route that you would normally go, but start to look around and see in the market, there's a thing called LoopNet.

There's different real estate agencies, there's Cushman and Wakefield, which is the affiliate that we're with, there's CBRE. There's national commercial real estate offices and groups. And typically, if you're in a bigger city, those are probably the type of agent you want to look for that has a great affiliation with a bigger agency, because they actually have more resources, typically.

Now, if you're in a smaller area, going with someone that has a reputation and that maybe a friend or a family member has used is also a good way to do that. It just depends, I think, more on your market and your comfort level. But certainly have conversations with people around you who maybe have recently leased or are in the process of leasing and have a conversation with that person if they're too pushy or if they're too obnoxious or if they're too sensitive or what have you.

Just like anything else, you want to find someone that's a good fit because it's a relationship. So I would say you have to just kind of do your homework and ask around and see who's out in the market doing deals and why are they doing deals. Usually the people who you meet through others are a good resource.

That's a great point. I think a couple of things that you brought up there that I really like and want to make sure people understand is there's a difference between a commercial real estate agent and say a residential real estate agent, where you're not buying a house here, you're renting and leasing space, and understanding your market. Understanding what it is, everyone's different.

You say the real estate in upstate New York is different than it is in Manhattan. It's going to be different than it is LA to Austin, Texas. Everything is different and it's relative to your market.

You have to understand what you're going to pay and what's fair. You have to understand what other people are paying and what you're getting in your actual space. That being said, what should people look for aspects that they should look for in their space, in their building, other than location?

I mean, we have to factor in stuff like parking, how many rooms, those types of things.

Well, it's interesting. I never really thought about parking, but it has become a topic of interest in our current office because depending on what time of day it is, if the bank next door is busy, it's a bit of a challenge. So the thing that sometimes people don't really do when they're looking at a property, an agent might show you a property, they might show it to you on a Friday afternoon.

Well, on Friday afternoon, maybe some of the offices in the building are closed, and so parking is less of a premium. But if you come back at 10 AM on Monday, and you try to find a parking spot, you have to look at when you're doing business, what's it going to look like? The same is true as far as traffic.

You might go see a property at a time of day when it's not that busy, and you think, well, the location is great and the access is great, and then come to find out at 12 o'clock on a Wednesday, you can't make a left-hand turn out of there. Sometimes it becomes a barrier, and one of the things, and again, I use myself as a good example because I did all this without having the knowledge and now it's like, I'd like to pass that information along. But someone showed me a space in the current building we're in is a two-story building on a medical campus, and we have visibility from a pretty busy road.

But they took me to the second floor and showed me a thousand square foot space because I said, well, my budget, I think a thousand square feet, I'm first starting out, that's probably about as small as they would show me in a particular building. And so we went and looked at it. And when we were on our way to that space, we walked by a space that had access, direct access to the parking area, and you didn't have to go through a subset of doors, ride an elevator, and then go through another set of doors after you went down a hallway to get to it.

And we walked by on our way out, and I said, what's behind these doors? The lights were off and didn't look like it was being used. And the person, it actually was the landlord, he had said, oh, he said, well, that was our showroom for another medical building we were doing, and we would bring the providers in, and we would show that space, but it's 2,000 square feet, and you said you only wanted 1,000 square feet, so I'm showing you the space upstairs.

And I said, well, let's talk about this 2,000 square feet. You know, it's vacant, maybe we can make some sort of deal. And I will say I'm very thankful that we took the time and that I happened to walk by that space and realized that it was a possibility because it had direct access, which has made all the difference in our practice.

And also we've been able to expand into that larger space. So sometimes depending on the landlord and what their ability is, you know, you might say, I only need 900 square feet, but that 900 square feet could be in a very remote part of a building or have poor access or poor lighting or when it rains or when it snows, they pile the snow there or the rain there and it's not desirable. And it creates a barrier for your patients.

So you want to always look at it at different times a day, different days of the week, and then also look at the bigger picture. If you think, you know, you'll always only need 900 square feet, you know, then look at those spaces. But if you feel like, I think down the road we're going to grow, you need to think about that in the back of your head.

And how are you going to do that? Because you don't want to necessarily move locations because that becomes a challenge for some of your patients. You want to look down the road a little bit.

And oftentimes, that's where an agent is more helpful, because they can ask you some of these questions that you don't always think about. And then they can also point out to you, maybe a five-year lease is something you want to do if you're leasing as opposed to a 10-year, because you're locked in in that 10. So those are some things to start thinking about overall.

How many approximate square footage in rooms do you think is appropriate when you're starting out?

It depends on how big you want your rooms to be. And again, a lot of these things happen to me by luck. Our rooms are nine and a half by 12.

They're a little long, but when you get the table in, we like to shut the door for privacy. But with COVID, we're not shutting the door right now, because we're trying not to touch everything. But how do you want your office to look?

Do you want patients to have privacy? Are you doing open adjusting? It all depends on what you're doing.

Get a piece of graph paper and plot out, okay, tables are this big, how much room do I need to walk around? Just get a sense of it. Go to other people's offices.

Really start to understand that you as the professional are the only one that's going to have to work in there and do it, and that the agent sometimes might show you a space in a seven by eight room is tight. If you have a patient that's tall, and where do you position the table, and how do you shut the door, and where you stand when you do that, there is a lot of practical things that you don't always get to do. It's not like driving a car.

I'm going to test drive it. I'm going to go fast, go slow. I'm going to open the door, get in and out six times.

I'm going to open the trunk. You're not always thinking to do that when you're looking at spaces. You're kind of timid and you might walk through and go, this looks good.

Then the next time you see it, it's pretty much on paper. Next thing you know, you've signed the lease and you're in there and you're going, oh, Jesus, room's too small. Oh, I can't move this wall.

Again, that's sometimes where the more you can see, and it depends on what the space is currently being used for. Some people are great at visualizing what it could be, and some people aren't, and that's okay. That's where you need help with some of those things.

Again, the value of the agent, especially an agent who's done more, and I say medical is a catch-all, but professional type office space for sale or for lease, that's the difference. It's funny, I know you mentioned earlier about the difference between residential real estate agents and commercial. Some residential do commercial, but I will tell you in the last year or two, I've worked with two residential agents and both of them said to me, I've never done a commercial deal.

This is a little bit different. I was happy to help them through the process, but there is a certain value if you're going to do a commercial transaction to find that agent who just does commercial. It's like you're a chiropractor.

You work on the spine better than anybody in the world, but yet there's people out there who will say, I can deliver an adjustment to the spine. As a chiropractor, you roll your eyes and you go, no, you can't do what we do.

That makes total sense though. But then you talk about not being able to have that vision for the interior design. What type of other teammates, when you're starting that new office, you've got your realtor, who else do you want on that team?

If you're purchasing a property, sometimes architects will do non-stamped drawings for you and help lay out a space. Agents can help you. A lot of times they have marketing people in their office, they can take a space and put it on paper and help you work with it.

Some firms do build and design with real estate, so they have those tools. That's one side of the equation. If you're leasing, a lot of times you might say to the landlord, do you take care of the build out and they roll that in.

A lot of times when people just, I want to make sure I cover this, but when you're looking at a space for lease and they tell you, hey, it's $15 a square foot, let's say for a number, that $15 a square foot is as it sits now oftentimes. They might say, we'll give you a build out allowance. What that is is, okay, say you can't use it as it sits.

Say you need this room here, you need a kitchen, you need a bathroom, you need whatever. They'll give you an allowance of say $100 a square foot. But now say that build out cost $200 a square foot.

Again, these are really high prices. I'm just using round numbers. That build out cost gets sometimes amortized over the time of the lease.

Again, it's like if you bought a house and it's not quite what you wanted and you needed to make some renovation to it, that you'd have to take out another type of loan, whether it's a home equity or some other type of loan, and you'd be paying that off. Sometimes you could put those together. The landlord oftentimes when you lease does that.

But a lot of times you don't understand that or are aware of that until someone sits down and explains that to you. There's sometimes other hidden costs in things. I know this is a sidebar from like who else do you need in things, but that's where a relationship with a bank.

So say maybe you tell the landlord, it's more advantageous to me and my accountant feels like it's more advantageous for me to take out a loan and do the build out myself. Some landlords will let you do that because hey, if you're like me, you saved a lot of money because you painted everything yourself because you had six patients your first month. You had time to do these things and you were hungry and you were going to work to save some costs.

So it all depends on the situation and where you're in. And for some people, they're already busy and maybe this is a second location. Well, you're not going to have time on a weekend necessarily to be painting things and doing some of the things that maybe you could do to save some money.

So you have to pay someone. So that's part of your budget. So a relationship with a bank, having your accountant, having your attorney, who you can ask questions to so you can understand the lease.

The lease is never really a problem until you have a problem. When you have a problem, that's when it's like, oh, did we do our homework? Did we ask these questions?

And a lot of real estate agents who are good at what they do help you ask those questions. It doesn't cost you money to work with the agent to say to your attorney, hey, my agent brought up this and here's this. They also a lot of times know the caveats of how certain landlords are and how certain deals might go because they have a different kind of experience.

So you will have a lot of people that you may or may not need and asking questions and having other people who can help you with that is important because they can put you in touch with others that you might need.

So a lot of times what happens is you get this timeline in your head or an anticipated timeline of when I want to open or when I can open. We all know build-outs take longer than anticipated almost every time. So what do you have seen in your experience from going out looking at space to when I can open doors?

Depends on a lot of things, factors of how flexible you are as a potential, say you're leasing, so as a potential tenant. When the landlord comes back and says, I'm not going to give you X, Y, and Z, are you going to say, okay, because you just want to make the deal? So there's that.

So you go and look at spaces, you identify a space. Now, hey, there's renovation. That renovation requires the landlord or you to pull a building permit.

Well, with COVID, do you know how easy it is to pull a permit right now? It is definitely more of a challenge now than it was. Now, that permit requires you to have architectural drawings.

So you have to work with an architect or the landlord may have one that's like attorneys, they sometimes have them on retainer, and they will drop everything and get the space drawn and whatever. It all depends on what it needs. So to say, it takes three months, it could take more.

Yeah, it's kind of an unfair question for you.

Well, again, the challenges of where we are in our lifetime right now with COVID, it's like, I was talking to a guy from Home Depot, there's a national shortage of pressure-treated lumber. Who would have thought? So now, if you're building a house and you want a deck, and the bank requires you to have everything done before you can close on house and move in, you could be waiting for that deck to be finished, and pretty much the house is finished, but you could be waiting for that deck for six more months.

So you have to give yourself enough time. It's never too early. When we have people looking because their lease is coming due, you want to start like two years ahead.

It sounds ridiculous, but it's the truth. You don't want to be forced into a rash decision. Like I said, if the landlord says, well, yeah, you want to pay $10 square foot, but it's 20 and I don't really care, and you have to move and you're stuck picking and choosing, well, you're going to be paying $20 a square because you're not going to have much choice.

So the more lead time you can give yourself, the better.

Yeah, that's phenomenal advice. We could honestly sit here and talk about this for another hour. Well, I know everyone is busy.

I have patients at some point.

Because I love talking about this stuff. I know you do as well.

It's fun. It's a lot of fun.

I really appreciate your time. You've helped me and I mean, I'm sure so many people here today with what you've been able to share with us. So thank you so much.

Yeah, so the name of our practice is Meridian Chiropractic and Wellness, and we're in Liverpool, New York, which is basically upstate New York. I work with Cushman and Wakefield, Pyramid Brokerage Company in Syracuse, New York, and I work with great people and I have a lot of other agents that I work with who do an excellent job of working with clients in that market. Cushman and Wakefield is international, so check out their information if you're in a city that has a Cushman and Wakefield affiliate.

It might be a great one and I don't want to only toot our horn, but they're a great company to work with.

Well, thank you so much. Again, thanks so much for taking the time. I know you're busy, so taking this time to share knowledge with our listeners, let everyone know, really that growth and success still is possible, even in this new reality.

It's a bonus. And thanks to our listeners for tuning in to Catch Up with ChiroTouch. We would love to hear from you, so we have an inbox set up.

It's podcast at chirotouch.com where you can send us questions, feedbacks, comments. So let's know what you want to hear about. Send us a note at podcast at chirotouch.com.

Remember to tune in every week on iTunes, Spotify, wherever you consume your podcasts. Thank you again for listening to Catch Up with ChiroTouch.

‍