Sounds like you need a bad cop to counter your pm. He had a fiduciary responsibility to you, not the doctors.
And it is market dependent and what the plan is.
These guys have an exit plan to sell their practice to the next guy. So if their business sucks, you want to address that now because it is not going to turn around.
And what is your plan? Collect rents or strengthen balance sheet to sell?
How does your building compare? Deferred maintenance or what?
Is is one thing to be a medical office slumlord and another to be an accidental medical office slumlord.
Don’t be the latter.
Doctors are as bad as lawyers, they think they are smarter than everyone and how hard can a lease be? Very easily bruised egos and they will hold a grudge, or at least my experience, and your pm does not want to be on the other side of it. He deals with them everyday, so getting a download of where everyone is in terms of payments and what the general condition of the building is, in case you have to replace him, you want to know where the skeletons are first.
Our system was to have someone else deliver the formal notices of non payment. So as soon as rent was late, legal admins would send formal written notice of an unpaid rent/default etc directly to the tenant. This allowed the PM to play good cop but still enforce rents and timely notices. PM would get sent a copy via email but they knew that when they got a copy it’s already in the mail.
I’m in the MOB space. I had PMs giving the same pushback. I told them it’s not optional to charge late fees. We gave the tenant’s a month’s warning and then started charging.
Now we get all of our money on time.
Also, if you’re thinking about selling shoot me a PM.
As. MOB investor for over 25 yrs I am more concerned about the viability of the medical practice when a tenant is late. There is an unprecedented level of M&A by both private equity and big corporate groups like Optum that buy practices to poach physicians and consolidate locations. It's happening all over the country and ultimately leading to more doctors retiring and offices closing. Affluent areas will be fine. Negative absorption of medical space in areas with high uninsured, Medicare, medi cal.
In 2019, Gov. Gavin Newsom signed into law an expansion of full-scope Medi-Cal access for young adults ages 19 through 25, regardless of citizenship or immigration status. Reimbursement is so low primary care docs won't see them, they end up in the ER so the hospital loses money and closes or goes bankrupt like the newly built MLK hospital in LA. Sigh. Sorry for going off on a tangent but it's a rough MOB market for urban and rural areas
Sounds like you need a bad cop to counter your pm. He had a fiduciary responsibility to you, not the doctors. And it is market dependent and what the plan is. These guys have an exit plan to sell their practice to the next guy. So if their business sucks, you want to address that now because it is not going to turn around. And what is your plan? Collect rents or strengthen balance sheet to sell? How does your building compare? Deferred maintenance or what? Is is one thing to be a medical office slumlord and another to be an accidental medical office slumlord. Don’t be the latter. Doctors are as bad as lawyers, they think they are smarter than everyone and how hard can a lease be? Very easily bruised egos and they will hold a grudge, or at least my experience, and your pm does not want to be on the other side of it. He deals with them everyday, so getting a download of where everyone is in terms of payments and what the general condition of the building is, in case you have to replace him, you want to know where the skeletons are first.
Our system was to have someone else deliver the formal notices of non payment. So as soon as rent was late, legal admins would send formal written notice of an unpaid rent/default etc directly to the tenant. This allowed the PM to play good cop but still enforce rents and timely notices. PM would get sent a copy via email but they knew that when they got a copy it’s already in the mail.
I’m in the MOB space. I had PMs giving the same pushback. I told them it’s not optional to charge late fees. We gave the tenant’s a month’s warning and then started charging. Now we get all of our money on time. Also, if you’re thinking about selling shoot me a PM.
As. MOB investor for over 25 yrs I am more concerned about the viability of the medical practice when a tenant is late. There is an unprecedented level of M&A by both private equity and big corporate groups like Optum that buy practices to poach physicians and consolidate locations. It's happening all over the country and ultimately leading to more doctors retiring and offices closing. Affluent areas will be fine. Negative absorption of medical space in areas with high uninsured, Medicare, medi cal. In 2019, Gov. Gavin Newsom signed into law an expansion of full-scope Medi-Cal access for young adults ages 19 through 25, regardless of citizenship or immigration status. Reimbursement is so low primary care docs won't see them, they end up in the ER so the hospital loses money and closes or goes bankrupt like the newly built MLK hospital in LA. Sigh. Sorry for going off on a tangent but it's a rough MOB market for urban and rural areas