Not surprisingly, life moves pretty quickly for Dr. Ravi Shah, M.D. A leading neurologist, hospital medical team leader and concussion protocol specialist for the NFL’s Denver Broncos, Dr. Shah has now added real estate developer to his curriculum vitae as a principal in the Limelight Healthcare Center development in Castle Rock, Colorado.
Dr. Shah had previously invested in a medical office building in Parker, Colorado. So when he recruited Bart J. Connolly, Esq. to develop a medical office building in Castle Rock, Colorado they began talking to multiple banks to arrange financing for the project they called Limelight Healthcare Center.
DR. RAVI SHAH, M.D.
Founder and President, Neurology of the Rockies, P.C.
Stroke/Neurology Director at Parker and Castle Rock Adventist Hospitals
Independent Consulting Neurologist, Denver Broncos
Partner, Limelight Healthcare Center
“It wasn’t an issue of finding a bank,” Dr. Shah explains. “It was an issue of finding the right bank. Academy Bank gave us the most flexibility – in the structure, length and terms of the loan.” Financing was completed recently on the Limelight Healthcare Center, a two-story, 21,000 sq. ft. medical office building.
UNDERSTANDING THE VISION
Academy Bank Senior Vice President, Chris Martinez, had cultivated a strong relationship with Dr. Shah and Mr. Connolly over the last several years, and understood the vision of what they were trying to accomplish. “We were flexible with the timing and with where they stood with pre-leasing,” explains Martinez. “Bigger banks can’t really adjust to certain factors with construction projects, but Academy Bank is committed to developing credit solutions to meet the unique needs of our customers.”
Dr. Shah agrees. “Some banks just don’t have the appetite to do the construction piece.” he says. “But Chris was really involved in commercial medical real estate, so he put together a deal that allowed us to have longer terms of construction, which we liked.” Martinez considered other elements of the deal, too, like the long-term potential of the building’s tenants, the proximity to related healthcare facilities and the growth of the Castle Rock community.
“We knew what it meant for Dr. Shah to be on the campus of a big hospital,” Martinez says, referring to the Castle Rock Adventist Hospital, an affiliate of Centura Health. “We saw the visionof what they were trying to do, and that's what convinced Dr. Shah to partner with us.
“Banks typically like financing medical office buildings,” explains Dr. Shah. “Academy Bank did too. So it wasn’t a matter of working out just any deal, it was a matter of working out the right deal.”
PARTNERING WITH ACADEMY BANK IS JUST WHAT THE DOCTOR ORDERED
When they began planning the development of their medical office building, Dr. Shah and Mr. Connolly identified what they wanted from a lending partner. “We wanted someone local who had a foot in the community and who we could build a long-term partnership with as well,” Dr. Shah says. “We wanted someone we could call who would stop by to discuss things.”
The Limelight Healthcare Center is the first medical office building that Dr. Shah and Mr. Connolly have built together as partners. Physician-owned medical buildings are growing in popularity as the healthcare market evolves and independent physicians seek additional income sources.
In Dr. Shah’s case, because he has an independent practice, and is not employed by a hospital, he was able to take an ownership stake in the project and ensure stable office lease rates for his own medical practice. “Medical office rent is pretty out of this world,” Dr. Shah explains. “Physicians need to monitor overhead closer than ever before. A lot of them are turning to the employed model to avoid all of that. As physicians, we don’t make money unless we’re in front of patients. Some doctors look for additional avenues for income.”
Dr. Shah’s real estate investment partnership with Mr. Connolly serves that purpose, and reflects a growing trend among physicians to invest in medical office buildings. Large institutional investors have also come to recognize the desirability of these properties, as they deliver both stability and consistent returns.
PUTTING DOCTORS IN THE LIMELIGHT
At the Limelight Healthcare Center, Mr. Connolly has been responsible for identifying the vacant land with Dr. Shah, negotiating and closing the land acquisition, and working with the Castle Rock Economic Development Council to secure project rebates. He has also overseen design and construction, negotiated lease agreements and tenant buildouts, and manages day-to-day operations of the property. Dr. Shah attracts tenants from his wide network of physician colleagues.
Dr. Shah is enjoying the process of attracting other physicians to the building, too, not just because of the prime location but because he can offer them a chance to consider an ownership piece. “As a physician, I can get other doctors involved,” says Dr. Shah. And he has – the building is on track to be fully leased shortly after opening. “I offer doctors the opportunity to invest in the building. So they can balance their business side with their ‘doctor’ side,” Dr. Shah says. “The amount of growth here is ridiculous – not just in the suburbs but in Denver itself. It’s a great place to live, work and raise a family. Doctors have a good place to practice – that’s a good draw.”
“For some doctors, it’s tough to get into business deals because you just don’t learn about business during our training,” he explains. “So it can be hard for a doctor to be involved with a bank and want to deal with a bank. But a lot of younger doctors are branching out – and are a little more interested in growth. Medical office real estate makes the most sense to branch out – because they’re paying a lot of rent already.”
GETTING A DONE DEAL WITH ACADEMY BANK
For a physician whose specialty is in helping victims of stroke, Alzheimer’s, Parkinson’s and other neurological conditions on a daily basis, it’s nice to see an uncomplicated, seamless process happening on the business side of his work. That’s exactly what Dr. Shah and his real estate investment partner got when they teamed up with Academy Bank.
According to Dr. Shah, “Academy Bank’s flexibility in structuring the loan length, interest rate and terms was a deciding factor. After looking at all the numbers, Academy Bank was just the best option for us.”