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DALLAS-Playing to a market niche, a 17-year broker has launched Globe Medical Realty Advisors LLC in a bid to build the nation’s first tenant rep firm for the medical office industry. Two offices have just opened in Texas, one more will launch in the first quarter and then the plan moves outside the state’s borders.

David Rutson, the Dallas-based firm’s principal, has set up shops at 8117 Preston Rd. in North Dallas and 1200 Post Oak Rd. in Houston. San Antonio is next on the trip ticket. Rutson says other “markets of interest” are Raleigh-Durham, NC, Las Vegas and Phoenix. The goal is to have three to five brokers on the ground in each city in addition to physician board members in each market.

Charles Chou is leading the three-broker team in Houston. The new company’s board members include Dr Ron Hellstern, founding partner and former chairman of a national practice management company with more than 250 physicians and revenue of exceeding $250 million a year, and Dr Lillian Chou, who has extensive real estate experience and general partner of a 106-bed hospital that opened this year in Lubbock, TX.

“Any market, with the strong downturn, is ripe for physicians to get good deals. Physicians should benefit from this,” says Rutson, who’s spent the past seven years of his career focused on the medical office industry. “We’re not a typical brokerage firm, we’re very physician centric and physician driven.”

Rutson tells GlobeSt.com that he has yet to come across another tenant rep firm solely dedicated to medical office users. National brokerage houses and developers have in-house teams, but he plans to be the Studley of the niche industry. “We’re trying to do something that’s different,” he stresses.

The influx of developers into the medical office arena has created “many opportunities,” Rutson says. “We analyze what the developers are producing. That’s what we like to do.”

In the summer, Rutson sold his stake in Texas Medical Realty Group, a brokerage firm he co-founded in 2005 to service one nationwide management group. “I saw the opportunity to take this beyond one practice,” he says.

The medical office industry’s fast-paced growth has attracted many top-notch developers. But, Rutson says the typical game plan is build, hold for two years and sell. For a physician with a seven-year lease, he says that could be a problem. “How does this affect the practice? Does it make sense seven years down the road? I’ve seen too many physicians who haven’t really understood development,” he says. “They really need a neutral firm to review all options.”

Rutson says he’s preparing his clients that developers, in limited partnership arrangements, might start expecting personal guarantees for leases in light of the present fiscal crisis. “Doctors need to understand all their options rather than one option, what they need long term and what they’re signing up for,” he adds.

According to Rutson, existing medical office space generally costs $20 per sf to $22 per sf for a full-service lease whereas the new space is fetching $27 per sf to $28 per sf, triple net. He says past restrictions kept negotiations at a minimum, but more medical office buildings are owned by REITs and investment groups, neither of which has the same mandates as a hospital-owned building.

“It was the right time to start this up,” Rutson says. “And with what has happened in the financial market in the past two to three months has given me more comfort that this is the right time.”

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