For Toby Scrivner, serving his clients starts and ends with one fundamental principle—total team commitment. Throughout his 11-year tenure with Stan Johnson Company, Scrivner and his team have focused on serving clients in the healthcare sector, an industry that has witnessed tremendous change and disruption over the past decade. For physicians and clinical operators, the frequently shifting healthcare market has created investment opportunities with their real estate holdings that they are interested in exploring.
“When we sit down with our clients, we realized early on that not all clients had the same needs or ultimate objectives,” says Scrivner, senior director of healthcare real estate. “Understanding why our clients come to us for advice on their real estate holdings is of paramount importance as we evaluate an assignment. Our clients come to us with a lot of different objectives, but there is a common theme among them. They recognize [that] they have a capital opportunity with respect to the real estate they lease and/or own, and they would like advice on how to maximize their return to redeploy that capital—whether for reinvestment in their core business, for a clinical service expansion, or some other need.”
Scrivner and his team focus solely on healthcare investment properties, as familiarity with the industry and its ever-changing landscape is of critical importance to physicians and practitioners looking for a partner to assist them.
“Every one of my clients has unique requirements and unique investment objectives,” Scrivner says. “Every week, I talk to someone new about a clinical expansion they’re excited to launch with the right equity injection, or a building development that could be developed if only we had an equity partner that sees the opportunity, or a lending partner who could finance the project. Our clients are some of the smartest, hardest working people you will meet, but they spend their days seeing patients and helping people achieve wellness.”
As a result, Scrivner explains that clients are spending a great deal of time running investment analyses and valuing lease economics, but all of this effort has a major impact on maximizing the value of their buildings.
“If we can serve them by helping them come up with the most prudent real estate investment opportunities, we know that can help them take care of their families or continue doing what they do best, which is serving their patients,” Scrivner says.
Scrivner and his team handle every aspect of the commercial real estate market, including locating, analyzing, and facilitating the sale of investment-grade commercial properties, accessing capital raised through syndication, and joint venture partnerships. Having an opportunity to serve a group of clients dedicated to serving others has been a core element of his career. It’s one of the main reasons why he enlisted in the United States Navy as a firefighter when he was 19—a decision he says is still one of the best he’s made.
“Coming from a small town and not having any sense of what I wanted to do with my life, the navy gave me guidance and taught me self-discipline, perseverance, and the reward that comes from commitment to service of a mission and a team,” Scrivner recalls. “I’ve used lessons learned in the navy throughout my career.”
Among these lessons is the importance of seeing a project or mission through completion. One example is his work on the valuation and sale of a hospital and medical office property in Modesto, California, where a group of orthopedic surgeons had a minority interest in the hospital-operating company, in partnership with a surgery-center management company.
Scrivner worked with the partnership entity for nearly a decade, providing them with valuation and lease structuring advice while knowing that this service could help his clients optimize their real estate value at the point in time where it made the most sense for them and their practice. Last year, Sutter Health System approached the partnership about selling an interest in the hospital-operating company, creating an opportunity for his clients to realize the value they had positioned themselves in to achieve through a long-term partnership with Scrivner’s team.
“We looked at what [Sutter’s] acquisition of the practice would mean to the enhancement of the credit of the tenant,” he says.
Scrivner and his team presented probable scenarios to the partnership based on their valuation analysis of the lease economics throughout the negotiation process. “We aided the partnership entity in negotiating the best terms possible in order to maximize proceeds from the real estate sale,” Scrivner says. “Once the sale of the operations was complete, our role was to facilitate the real estate sale based on the new lease and new credit of the tenant.”
Thanks in part to Scrivner’s tenacity on the project, and the effectiveness of his healthcare team and their sales process, the physician group received 185 percent of the total assessed value of the real estate that they could repurpose toward other personal objectives.
Scrivner doesn’t anticipate the interest in healthcare real estate to slow down any time soon. One current project he is particularly excited about is a sale-leaseback of Orthopedic & Sports Institute of Fox Valley in Appleton, Wisconsin. The property is an 8.01-acre parcel, with the fee-simple ownership rights to a 67,205-square-foot single-tenant medical office, surgery center, and Recovery Inn—all of which were built in 2005.
“In taking the offering to the market, the plan for the doctors is to cash in on the equity they have in real estate and invest that money elsewhere into the growth of their practice,” Scrivner explains. “We’re assisting the practice owners with a sale that will relieve them of personal guarantees and focus on the value and long term viability of the practice.”
Scrivner and his team have closed more than $1.2 billion in healthcare real estate transactions, including about $200 million in 2016. That track record of service has exposed the team to a breadth of experience that allows them to advise their clients through a variety of scenarios. Connected with the broader Stan Johnson Company platform, it allows his clients access to a buyer pool far beyond healthcare. The company’s track record and national platform are key components to enabling clients’ success.
“For 30 years, Stan Johnson Company has honed our relationships with institutional, private equity, and individual buyers,” he says. “Additionally, we are a well-established firm utilized by buyers in need of completing a 1031 exchange. These buyers are typically willing to pay up for an asset as they are motivated to avoid paying taxes from capital gains on another sale.”
This access to buyers, he adds, has helped Stan Johnson Company to stand out because it can mean a bigger buyer pool. “When you have more buyers, it drives pricing,” he explains. “It serves our clients very well.”
Scrivner believes firmly in the power of specialization. As a firefighter specialist in the navy, he was taught to stand his ground and attack the fire relentlessly, regardless of the heat or perceived danger. He stayed focused on the mission because it meant protecting the crew from greater harm, regardless of personal risk. Scrivner now directs his focus to his healthcare clients, but the desire to protect and serve is still what drives him to this day.
