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Congressional Plastic Surgery in McLean, Virginia

Brian Perry Headshot
Episode #: 216
Congressional Plastic Surgery in McLean, Virginia

Guest: Brian Perry
Topics: Congressional Plastic Surgery, healthcare tenant leasing


Chris Ressa 0:00
This is Retail Retold, the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC Management.

Welcome to Retail Retold everyone, today I’m joined by Brian Perry. Brian is a broker and focused on the healthcare industry for EXP. He’s based in the mid Atlantic. I’m excited for him to be here. Welcome to the show, Brian.

Brian Perry 0:33
Thanks. Happy to be here.

Ressa 0:35
So Brian, tell us a little bit more about who you are what you do.

Perry 0:41
Okay, I am originally from Jersey, moved here after my MBA. Living in Jersey, I’d worked in New York, previously moved to the DC area, January 2020 to kind of start getting going with my commercial real estate career as kind of recruited through military recruiting. So, you know, 2020, got started here.

Met a lot of people, made a lot of relationships during that time when things were not as good. And now I focus on DC, Maryland and Virginia. The DMV is primarily where I focus on healthcare, tenant, tenant rep, tenant rep mostly, and some landlord.

Ressa 1:30
So you were in were in New Jersey from I didn’t know you’re from New Jersey. I live in New Jersey.

Perry 1:36
Oh, yeah. So I’m from a small town called Long Valley.

Ressa 1:41
Oh my God. No, well, a lot of friends. They’re less more central man.

Perry 1:46
That’s that’s where I went to West Moors. Yeah.

Ressa 1:51
So I’m from the Netcom Byron area.

Perry 1:55
Oh, yeah. So you’re like, you’re from my hood, basically.

Ressa 1:57
Exactly. So I don’t live there. Now I live in a town called Kinilaw. But I went to Lenin Valley High School. Right there. Beautiful area, Long Valley. It’s been booming. Actually. It’s been growing pretty significantly over the last few years. A lot of people have been moving out there.

And working out east. For those who don’t know, long valleys like, you know, pretty country area, northwestern New Jersey, not far from the border of Pennsylvania. Right. And so from Long Valley, you mentioned military. You were in the military?

Perry 2:35
Yes. So I’m a veteran served Guantanamo Bay in Iraq. That was my first kind of career. And then I went through service, of course. Then I started working in New York City, which is what Jersey people do they go to? I mean, at least that’s what I did. I wanted to work in New York after after service.

So I did that for about six years lived in I’m sure you know, Hoboken. I was in Hoboken as well. So yeah, right there. Park Ave, right next to the train there. 77 Park, I think I was there. So that was my like, for like six years. But yeah.

Ressa 3:21
What you do in New York, what were you doing?

Perry 3:24
I worked at a company called Fitch Ratings. It was like, you know, analyzing credit risk financial portfolios. I did some weird things like tobacco and, you know, analyzing those payments that they have to do and a student loans credit card, so a lot of like, portfolio review.

And when I was there was the time when everybody was down on the rating agencies and trusting them. But for me, it was a good, really good experience to be in New York. That’s what I wanted to do look at numbers. And do that thing. So that was Yeah,

Ressa 4:07
I think the rating agencies came through, you know, came really highlighted to the general public on challenges through the movie too big to fail. Did you see the movie?

Perry 4:19
Yeah, of course. Yeah. Yes. So but that’s what it is. It’s a relationship. It can get too cozy in a relationship business like that, and people just No, I don’t.

Ressa 4:33
I got it. I got it. I get it. Yeah. So if you haven’t seen too big to fail, it’s a really entertaining way to talk about the great financial crisis. You should go see it everybody. How do you end up in DMV and in commercial real estate?

Perry 4:53
Yeah, cuz I don’t have I didn’t have a background in that the most I knew was my mom did residential, which is not commercial, I really, I was looking into finance marketing to work in New York, I had almost gone to the Madison, I ended up going to Boston College for my MBA, but I almost was gonna go into brand management because I liked marketing.

And I got accepted into the Madison, Wisconsin NBA brand management, and they really are pretty selective. But I didn’t want to go to the Midwest being a jersey guy. But after that, I came back and I was like, from Boston, I came back I got there’s a military, the it’s called the Lucas group, they do military recruiting. And to be honest, I just kind of went down the list of potential things I might want to get into

Ressa 5:50
and what I gotta write this down, what are they called?

Perry 5:52
The Lucas group,

Ressa 5:55
the Lucas group.

Perry 5:56
So the my, my company that I just left, they were recruiting military to come down to come to the DMV. And I was like, Okay, I’ll come check it out. I had a condo there. So I wasn’t really I bought like a year earlier. So it wasn’t planning on moving. But I went down there, you know, they talked to talk, they say, Hey, there’s an opportunity here, I’ve really liked that they were niche in health care.

Because that’s just how my brain works. I have to like, have a lane where I focus, and family business really nice. sold me on it. And I moved, you know, a couple months after I came and visited them down here. And I just got to work. Soon after that was January 2020. About that I came down and then that’s when I started

Ressa 6:56
A wild time to enter commercial real estate man a wild, wild time. Because 90 days later, like there wasn’t a lot of transactions happening. So how did you in such a short time period, like, create a niche and get like clients for lack of a better word?

Perry 7:24
I think because I had already understood it. I was going to do my own business almost before. So I kind of understood the art the marketing aspect of getting getting known first, but one of the things I did is I wrote a letter to introduce myself to potential clients and build instead of just handing out my card. And going to different office buildings, I’d write a letter saying who I am. And that was pretty helpful then I was on LinkedIn quite a bit.

I was you know, getting a lot of attention on there. And I just started talking to everybody join different groups. It was just very active. Obviously, in the beginning, even though I have like a background and you know, business background. It took me a while for me to like, get confidence. But I had a mentor also that was talking to me. I met with him every week.

Talk to him every day he picked up the phone. So any deal that I came across he and I had questions I had some somebody directly there so it kind of gave me confidence to go out and you know, talk to people and you know, start start developing some business. Wow.

Ressa 8:45
You have a story about a plastic surgeon in McLean, Virginia, but before we go there and how that plastic surgeon ended up there an interesting story because it’s an owner operator, they own the building, which I’m excited about.

But before we get into that tell me what you think about what’s going on in healthcare real estate today from your vantage point and and you can bring me down what’s going on more specifically just in the DMV and healthcare real estate has some market like what are you seeing out there what’s going on?

Perry 9:17
So specifically in the DMV and the markets because I do do some in Maryland and DC. They’re not a lot of people are going directly to DC right now. It’s over the past year. I’m getting asked a lot more of things that are just in the suburbs, Arlington polls church, Tyson’s McLean. This is where people want to be like on the fringe not quite in DC. I mean, obviously I hope that changes.

But everybody wants to be around where the population is growing. You know, some renew All I’m doing now is somebody who has partnered with somebody, but now they want to have their own their own office. So there’s always business. People even looking to start their own office, or,

Ressa 10:17
But so why, so why are people Why are you seeing this push to the burbs versus in DC in your opinion?

Perry 10:26
Well, the development that’s going on is not in, in DC. So people see Crystal City in Arlington, because Amazon’s going there. And they’re like 8 million square feet. So all the developers are multifamily everything it’s going to be like a huge a huge new development there. So that’s attracting people to that area. Tyson’s where I am is a lot of business district, but the population is growing a lot. They’re building income growth. So

Ressa 11:03
so there’s opportunity. So those are growing. So put put simply, your opinion the suburbs are growing people are coming out of the city or even if DC has grown people are seeing the opportunity in the burbs. And that’s where they’re looking to locate businesses.

Perry 11:18
Yeah, I would say I mean, I mean, Fairfax County is very wealthy. So it’s kind of established. So but it keeps moving inching out to where people will be. But even like Paul’s Church, which is right near where I am, you know, they’re doing a ton of development, too. So they’re trying to, so those are predominantly, you know, 15 miles and into DC, are usually where people are looking.

Ressa 11:50
And what else anything else about the market that you’re finding interesting right now, some of the things that you’re seeing out there that are pretty consistent about what’s going on, as it relates to health care, real estate in the DMV market?

Perry 12:08
I think, I mean, we’re also seeing just in DC in general, they’re finally put something out there about having the government workers kind of come back to downtown, they’ve been gone since the pandemic. So if they go back to pre pandemic, pre pandemic levels of telework, then all that retail, all that activity, will I think start back up again.

And that might work might be where I have more people saying hey, I want to go to DC because these multifamily these complexes they have retail on the bottom and healthcare loves to go you know, kind of right underneath like a dental or a spa or something like that. So I think that well and the other market here that’s huge is Life Science In Rockville, so Maryland just because they have the employee potential employees here it’s you know, they’re that’s like a major hub for the life science.

Ressa 13:23
Are you anything else about like healthcare specifically that you’re noticing and how they’re thinking about real estate, the healthcare industry,

Perry 13:34
In general retail, they they want to be in the mixed use developments and healthcare will go on like the second floor usually that’s where they’ll put health care. They’ve been willing to pay more in rent than in the past. Fee for Service, the spas. Plastic Surgery, dermatology. I see a lot of that, that growing. Got it.

Ressa 14:04
Well, what’s the name of the plastic surgeon in McLean,

Perry 14:10
Congressional Plastic Surgery.

Ressa 14:13
Okay, so walk us through how did Congressional Plastic Surgery end up in McLean.

Perry 14:20
So actually, they were existing in McLean already. Okay. I had done my normal canvassing and cold cold to get an appointment with him. And so we ended up bringing the Rainmaker with me with one meeting

Ressa 14:40
just real quick, why did you call on this specific tenant? Was there a reason did you notice something like he was in a bad area what McLean what what was the reason he called me was actually

Perry 14:50
I was targeting plastic surgeon, okay, on my reach out and he was The former president of where I was at, he was actually the leasing person for that building. So he could talk the talk about about that. And I think I reached out to the society, the local society for plastic surgeons here. But he was willing to take a meeting, I did not think he already had like seven years left on his lease that I found out, so I’m like, okay, he’s not going to be ready to do something.

He’s not going to be ready to do something. But after talking to him, convincing them to kind of, you know, work with us, and I worked with him for at least a year, maybe a year and a half’s. Yeah, like a pretty long time. And one of the first things we did, I was like, Okay, well, let’s, you know, let’s keep in touch. And so we ended up keeping in touch, and he’s like, Hey, can you look at off market for off market opportunities? And here, you know, that that can be that’s a bit more difficult,

Ressa 16:04
It’s difficult everywhere.

Perry 16:08
So I did find one opportunity for forehand that was nearby, but everybody sells for a price and our valuation everything was like double. He’s like, Well, yeah, I’ll sell for a weapon million for as you know, $6 million building. I’m like, Okay. And then I looked at auction. And we actually were in a bidding for it was a bank location. in McLean, which was pretty nice. It was like

Ressa 16:39
on auction that Tom?

Perry 16:43
What is it the 10x 10x? Yeah,

Ressa 16:45
yeah. 10x 10x.

Perry 16:47
Okay, so on, on 10x. I believe that’s where I kind of found it. So we had gotten to the second round, where they

Ressa 16:54
were on 10x. Okay.

Perry 16:58
We got the second round, we put the bid. And I didn’t feel like he was so locked into it. For whatever reason, I was like, You got the parking, it’s about 3000 square feet. And first surgery center, I was like, this would be good. You have it, it’s near your previous office. It was like a good location. But what happened was, we put in a bid, we didn’t we didn’t get that bid.

But I found that later that there was all of these use restrictions on that property, and they had a temporary things were going to expire so that his use probably wouldn’t have worked anyway, there was like a long list of problems with the property, or restrictions. I had condos in the back, and the back. So I’m like, alright, that’s not going to work. But at least I know, he was, you know, somewhat serious.

And eventually, we found out down the street, there’s a building for sale, but I didn’t want to show it to him because it was like 16,000 square feet. But I found out he had gone to Texas looked at all those doctors down there with all their, the the size space they had. So he comes back here. He’s like I want, you know, much larger space. And so I really wasn’t opposed to that. And you know, good for May. So we ended up doing a deal for building sieves like 16,000 square feet.

Ressa 18:35
And what the was there a tenant in there? Was there a user in there was it vacant?

Perry 18:41
So there was a church user, like this and other other places, but in the basement level, it was a nice renovated building. So there’s three levels, there’s like a basement and then two floors above but there was a church person there, I guess, using the space a couple of days a week paying way below market rent. So I really wasn’t counting that. You know, because that’s like, okay, you know, we’ll probably move them out. But he sold a space.

And after he saw this space, lots of questions come up with parking. Elevator, is it ambulate you know, What size is it? Are we going to do overnight procedures and I don’t know about other other markets but if you try to do overnight here it just it’s really difficult and we can’t get the use permissions that quickly.

So as long as he wasn’t doing overnight procedures, they treat it just like the treat medical like office here the requirements along with the parking, so we had a civil engineer come out to kind of verify the parking it gross floor, how they do the calculations. Then I got a contractor that had built out these facilities to kind of get him comfortable. So I was kind of, and then I had his financial advisors I’m talking to to help them, kind of plug in the numbers.

And eventually we put in an offer. Gotta get the price down a little bit, to where, you know, we can make sense of it. And early on in the process, it was like, kind of going, okay, kinda not going astray. And then we got the appraisal. I know, I’m kind of skipping ahead like a long time of different things. But we get the appraisal, and I know you’ve probably experienced that, but the appraisal was very low. Yep.

Or what we’re doing. And I hadn’t had, I’d read through because I had another property in Falls Church, so I worked with a certain appraisal.

Ressa 21:08
So I have a question. I have a question real quick. So a couple questions. One, just curious for a reference point. At this point, what is he deciding to do with his the lease he has with seven years of term left?

Perry 21:21
He’s, he was confident that he would, because there is a demand here that he would be able to sublease it and he would be able to sublease it. So I said, if he’s comfortable doing it, you know, then I think is kind of realistic.

Ressa 21:35
Okay, so, one, so he’s going to sublease this existing. So to the appraisal comes in low. Is he financing this with mortgage?

Perry 21:44
He is financing. He’s getting 100% financing? From a bank here. So he’s not putting anything down? Yeah, he’s using Well,

Ressa 21:55
is it is it but so then it’s not a mortgage? It must be like a business loan.

Perry 22:00
Yeah, I mean, I use Atlantic union

Ressa 22:06
100% financing.

Perry 22:09
They, I mean, there was a couple other I mean, I had known somebody there. And I was kind of working with them, because they were known to do these kinds of deals with doctors. But they stuck it out because they had a little bit of competition when he was trying to call but they kind of pull it off the other competition to win the deal. But yeah,

Ressa 22:32
so Okay, so the appraisal comes in low, what happens next?

Perry 22:37
Well, let’s see. Panic. So So initially, I was thinking so one of the things that it came in low was because they were confused about the office versus the medical use the surgery center. I think they had thought because it was unique, because if it were just buying an office, May will be different, but it’s for medical, so we had to go back and try to…

Ressa 23:07
Defend your value?

Perry 23:10
Challenge and I think I think I did pretty good. I mean, I came back with a kind of an argument about this. This though it’s not all you know, it’s not overnight, it’s for a medical office. There’s not a lot available at all. So it’s kind of hard to find the exact cops because in Tyson’s This is like the top of the market for the suburbs, in a way for a small medical office building.

So to find the right comps to get the valuation, you know, with the seller of course, I went back to the seller and I said hey, you know, this came in low, what do you what do you want to do here? And they said, you know, because we’re not going to pay below appraisal, because he’s also got a million dollars in Bilbao, so that if we don’t get the amount to where it covers everything, you know, we can’t, can’t do the deal.

So went through that, that rodeos and the bank agreed to get a second opinion on the appraisal, and I had kind of learned a little bit from the first one. I mean, I wasn’t trying to change anything, but I’m like, Okay, what do they really need altogether to to get the to get to where we need to be. So I kind of just worked through that got a new appraiser assigned, got her everything she needs, like some of the tenant improvement.

I had to get all the things they were doing from like the finish. They wanted all these details. So that had taken me a while to get from the contractor what I needed but I mean, long story short, I ended up getting the appraisal number like the day before. It was due to like close. We were like running up against the clock kind of. So I felt like very last minute I was asking the appraiser to get back, they get back with it and ended up going to the finish line.

Ressa 25:28
And what was the, what was the what was it originally listed at?

Perry 25:32
It was six. Originally, it was seven. I was like, that’s way too much. Then they relisted it at 6.3 negotiated it to 6.1.

Ressa 25:45
And when did he close?

Perry 25:48
This was actually it was last summer. That was?

Ressa 25:52
Is he open yet? We’re still under construction.

Perry 25:55
He saw the bank. I don’t know if you know, but the banks are so like watching of everything going on. So I actually have to check because he had I told them to give him 18 months, kind of to get this built. So I actually have to check with a contractor to see, you know how close he is. Initially, we were talking more. But he had to do something with the elevator and all these things that that came up. And then he has space yes to lease.

So I was gonna lease that space for him. But they had to they had to get his work done before I could really do anything. But yeah, he should be. Should be in this summer. You know, I gotta get the guy to check in. But I mean, it’s gonna be good Surgery Center, you’re gonna make more money.

Hey, it was a witch, it costs a lot to go to the hospital to get time in the hospital. So that’s what kind of drives them to have their own space where they can do their procedures and not pay the fee they have to pay at the hospital.

Ressa 27:04
Oh, is that how it works? A hospital charges him a fee? Yeah. Oh, no. That’s how it worked.

Perry 27:11
Yeah, they charge that’s driving them to want to own and then run out of their facility. Some plastic surgeons kind of get ahead because they want to do it like just after residency. But they’re they need to work for a little bit before they’re going to get this. This big healthcare loans open up their own their own facility. So actually, it’s a few people I got to talk to about that. But yeah, that’s the big driver, because it’s a but they make a make good money here.

Ressa 27:48
So fascinating. Well, Brian, this has been great. We’re running up on time. I really appreciate it. Thank you so much for sharing the story about an operator who owns their own building a bit about how the how healthcare financing works.

And that little bit at the end about how I had no idea that one of the things driving surgeons to have, you know, to do surgery out of the hospital is the way it works is the surgeon is like essentially renting the space from the hospital for a period of time and they’re charging them a fee for that no or no idea. Well, Brian, this was great. I really appreciate it. Thank you so much, man.

Perry 28:35
All right. Thank you.

Ressa 28:37
Thank you for listening to Retail Retold. If you want to share a story about a retail real estate deal that you were a part of on our show, please reach out to us at This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you are a retailer, broker, entrepreneur, architect or an attorney. Also, don’t forget to subscribe to Retail Retold so you don’t miss out on next Thursday’s episode.

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