As an owner of a health care practice, have you thought of developing your own building to move into when your lease expires?

Today’s financial climate provides doctors with a unique opportunity to capitalize on this business decision. Lending agencies are looking most favorably at funding projects that are owner occupied and having an MD on the loan documents is a big plus. The other major advantage is the competitive construction market. Contractors have seen the price for quality new building construction decline substantially over the past 12 months.

But many doctors in San Antonio have found the building process to be overwhelming and prohibitively time consuming. Turning to a qualified team of development professionals is essential. These advisors should include an experienced real estate broker, a knowledgeable civil engineer, and a creative architect.

There are potential pitfalls throughout the process. All the easy pieces of land in San Antonio already have buildings on them; the tracts that are left have numerous challenges which must be overcome. Identifying these challenges early is the key to the success of any project. The importance is compounded when dealing with health care, where the stakes are typically much higher.

To start, a suitable site needs to be found. A good broker with a background in the medical market will help locate several viable tracts and negotiate the land purchase on your behalf. Carl Bohn of NAI REOC notes the significance of choosing a site wisely.

“Most doctors are careful when buying a home; they want to make sure that the area they choose will be a good investment. Unfortunately, not every doctor gives the same consideration to the purchase of a piece of land. It can be a huge financial commitment, when not given full due diligence.”

Because of the complexity of issues, it is highly recommended to consult with a civil engineer before finalizing a contract on a property. We commonly meet with doctors who are buying a piece of land for development and do not understand the property’s constraints or possible monetary impacts.

We can quickly look at a tract and tell you which issues will add time and extra development costs. These issues may relate to water quality over the aquifer, storm detention, flood plain limits, utility extensions, municipal easements, traffic access, and tree preservation to name a few.

For example, clients come to us with a tract they own that is over the recharge zone. The development of this land most likely will require construction of a water quality basin which can add six figures to the project costs, money that the owner has not budgeted for. The same tract may also have impervious cover limits which limits how much of the tract is developable. In some cases, the tract may actually be undevelopable.

Conducting a site analysis determines the usable boundary and any additional work that needs to be done in order for the land to be developed. This feasibility report greatly reduces the risk of encountering an unexpected situation or running into delays. It is easy to get burned in the real estate market.

The city is constantly refining the rules regarding certain ordinances, including drainage requirements, tree protection and allowable impervious coverage ratios. If all of the pertinent issues are not addressed prior to purchasing a property, chances are you are not getting what you thought you were getting.

The next step is to meet with an architect to discuss the current and future needs of your particular medical practice. What spaces do you foresee, how many of each and what size are the individual rooms? Remember, the more complete the information the better they can do their job. Armed with this data, the designers will be able to establish the ultimate built area of your proposed facility.

Working in a coordinated effort with the civil engineer, the footprint of the building can be placed on to the usable area of the property. The other indentified site issues are then overlaid along with the associated parking counts to validate if the property will meet the development criteria set forth by the owner. A final drawing is provided which illustrates all of the findings and is used as a record for future interaction with building officials.

The idea of conferring with an expert prior to a major purchase is not groundbreaking, but the intricacies involved in San Antonio’s development game can be daunting. Finding a team with a “Project First” Philosophy and which operates with exceptional customer service means that your questions will have answers that are researched, accurate and ultimately, time and money saving.

South Texas has earned continued growth in its medical community. The patterns and methodology of patient care is also evolving which translates to changing office needs. Convenience has become central to our society and operating out of your own facility allows medical providers the flexibility to meet this customer demand.

Following a proven development process increases success and provides doctors with the peace of mind necessary to sustain their practice during this exciting, but hectic period.