Healthcare Real Estate Trends and Capital Markets with Seth Gilford, Vice President, Healthcare Capital Markets at Transwestern 2-24-26

This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We're thrilled today to be joined by your brilliant commercial real estate guru, Seth Guilford. Seth, let me ask you to take a moment. We'll talk today about trends, things you're watching, a lot more. Take a moment and first introduce yourself and tell us about the core of what you do. Thanks, Scott. Appreciate you having me and great to be here with you today. My name is Seth Guilford. I'm the vice president with TransWestern's national healthcare capital markets platform. And in short, what we do is we specialize exclusively in healthcare real estate, and that's nationally. And what I mean by healthcare specifically is we do everything from acquisition work, disposition work, debt and equity placement, ranging from single tenant physician credit deals all the way to multi-tenant on-campus, ground leased complex transactions. But we're happy to help in all things healthcare. And that's our core focus. And take a moment. You spend a lot of time investing in medical real estate, healthcare real estate, a lot of it leased to leading physician groups. Talk about why that niche appeals to you and why so excited about that group in investing with or leasing to leading physician groups. Yeah, that's a great question. I would say one of the reasons a lot of our clients like the space and like the leading physician groups and why they like to buy these assets is a number of factors. Healthcare is sticky, right? A lot of times when doctors move into spaces, they're not going to be moving out They don want their patients to have to relocate find a new doctor office And typically the build outs are highly specialized which means the docs have put in a lot of their own money to retrofit a building or a space to meet their specifications So they don want to leave. And that security and that infrastructure makes investors comfortable buying those assets when they know their docs are going to be there long-term. And thank you. When you're working with great physician groups, what are some of the advantages they have as tenants are trying to lease well or rent well in today's competitive healthcare environment? Why are they attractive tenants? That's a great question. I think that a big trend we're seeing lately has been flocked to credit. It feels like lenders and investors are really focused on the tenant financials, their operating history, any partnerships they have with health systems to help them get comfortable with signing a long-term lease and it helps them get favorable debt terms. That said, that gives the leading physician groups a little bit of an edge in negotiations with these partners. When they know that they're a hot item and a hot commodity and they're performing well, they've got some leverage in terms of rent, maybe some TI dollars, abatement, or even co-investment opportunities that lesser credit tenants might not be offered because of their, call it shaky financials. Thank you. And talk a little bit about what are some of the trends you're watching in medical real estate or generally in real estate today? What are some of the trends that are front and center for you? Yeah, front and center, I would say first and foremost is we're seeing alignment between both health systems or physician groups and capital partners, whether that's a real estate partner or private equity group, we're really seeing physician groups leverage their real estate to help them expand and grow quicker and more efficiently with partners We also see one other thing that we seen for a while I sure you very familiar with Scott is that outpatient services are rising rapidly and that seems to be the best care method for people. But within that specialty, we're really seeing a big wave of freestanding EDs. Those are the hospital systems planting a flag in a market where they might not be able to put a campus or they don't necessarily need to put a campus, but they want to get those patients and and customers into their flywheel of the health system. So they're planting these freestanding EDs in high growth markets and demographically affluent markets where they know they can capture some patients and they just need to get to those patients quicker. Thank you very, very much. And talk for a second, Seth, what mistakes do you see physician groups make and how they approach real estate? Yeah, we see a couple of major mistakes. I would say one major mistake that we see is groups move too quickly to make real estate decisions without fully understanding the ramifications or all of their options. A lot of times doctors and physician practices, they wait until the last minute when they're busting at the seams and they say, hey, we need more space or we need to relocate. And they make a rash decision when in turn, they should really look at all their options before they need the space or before they need to move so they can balance location, TI costs, rent costs, term, and even explore rent versus purchase options. We just see a lot of these doctors move quickly last minute, and then it hurts them a couple years down the road when they don't have flexibility or they can't realize some equity that their practice is actually adding to the real estate investor. So we always advise these groups to talk to healthcare professionals on the real estate side like myself or any others that they want to talk to to make sure they informed before they jump into a new decision Thank you so much. And you've had this great career that you've gotten going. I've had a chance to watch it. Just remarkable. What advice, Seth, you give to people in their emerging careers as emerging leaders? What advice do you give to people? Yeah, thank you for that. That's nice for you to say, Scott. I would say one thing that's been very helpful for me and I would advise to pass on to the next wave of leaders would be to build those relationships before you truly need them. I would say this rings true across healthcare, real estate, real estate in general, and other sectors. It's easy to ask someone for a favor or ask someone for help when you really need it and at the last minute, but you got to build those relationships over time. So consistently going to conferences, consistently traveling to clients to take them out to lunch or to meet them in their office or maybe get out of the office and do something fun that you enjoy to do. But building those longstanding relationships is really going to help pay dividends when you do need that favor or when you do need to ask someone to give you advice. It's easier to do that once you've built that framework. And I would say, secondly, whatever your specialty is, if it's a local market, if it's national, if it's capital markets, leasing, just stay focused and really stay up to date on what's really going on in your space. Who are the most active buyers, tenants, lenders, and where are they moving and where are they going? Just so to make sure you're tracking the market and on top of your sector. If you're going to be the expert, you have to know what's going on in your backyard. No, fantastic. Seth, you've done a remarkable job. I want to thank you for taking the time to join us today on the Becker Business and the Becker Private Equity Podcast. Again, Seth Guilford, remarkable leader and professional. Thank you for taking the time with us today on the Becker Business Podcast. Thanks, Scott. Appreciate you having me. Thank you.