At Terravet Real Estate Solutions, our goal is to spread the word about the opportunities in veterinary real estate far and wide. Our CEO, Dan Eisenstadt, recently sat down with Kevin Bupp for the Real Estate Investing for Cash Flow Podcast to do just that. Dan shares details about his years of experience, industry knowledge, and exactly what led to the lightbulb moment when he spotted the gap in the market for veterinary real estate investment. Enrich your veterinary real estate knowledge with this episode of the Real Estate Investing for Cash Flow Podcast, covering the following topics:
What Attracted Dan to the Veterinary Real Estate Sector
Dan dives into his background in law before moving into real estate and investing. After co-founding a leading veterinary practice platform, one conversation with a practice partner sparked an idea that laid the foundation of Terravet as we see it today. Dan pinpoints the growing demographic of pet owners, a new demand for specialized spaces in veterinary care and the private payment model as clear signs of opportunity for long-term, stable investments in this niche market.
Terravet’s Deal Flow
Dan outlines the primary sources of opportunities and deal flow, including the importance of private equity corporations. Around half of our deals to date are through partnerships with corporate groups who want to invest in practices but not real estate, as a different level of risk is involved. Find out more about this process and what equates to the other half of our deals. Dan also explains the significance of Terravet being a buyer, not a broker, and how this is beneficial to veterinary practice owners looking for a real estate partner.
Ideal Lease Terms for Veterinary Practices
Dan outlines the key terms he looks for in a veterinary practice lease agreement. Factors including length of lease, Triple Net, and financial reporting are all essential in the decision-making process. Corporate guarantees are another green flag if added to the lease terms. Dan tends to avoid HVAC and parking lot responsibilities; however, essential terms can be real estate-dependent, so it is worth contacting our team directly to discuss.
Key Challenges in the Veterinary Real Estate space
Demand for veterinary services is not considered a challenge, according to Dan. In fact, recruiting veterinarians to fulfil the demand is more of a concern. Therefore, Terravet will not acquire veterinary buildings in parts of the country where staffing could be a struggle. Square footage, functionality and location are also key elements when considering to invest in a particular building.
Moving Shares via 721 Exchange
Dan and Kevin round off the episode by discussing the opportunities provided through a 721 Exchange. This method allows a property owner to swap ownership interest in their property for ownership shares of an Operating Partnership which owns multiple properties. A 721 Exchange allows investors to defer capital gains tax at the time of the exchange and provides greater flexibility in structuring deals. This exchange has been particularly beneficial, in our experience, for members of a real estate partnership who want flexibility in their share of the partnership — some may be looking for equity, others may be looking for cash. This is just one example of how a 721 Exchange could work for you.
Listen in full for more veterinary real estate insights
Listen to the full episode to hear the ins and outs of veterinary real estate investment. This episode is packed with expert insights for investors looking to learn more about veterinary real estate or a veterinary professional hoping to sell or expand their veterinary property. We are grateful to have the opportunity to share our knowledge with Kevin’s audience and spread the word about the opportunities in veterinary real estate.
Contact us for more information on how we can help you meet your veterinary real estate goals.