Veteran HRE broker sees new opportunities in retail sites, sale-leasebacks
By Murray W. Wolf
Bryan Lewitt got any early introduction to the healthcare business. As a high school student back in the mid-1970s, he worked for Tarzana (Calif.) Hospital doing maintenance work and delivering medications within the hospital. And after a brief flirtation with a career in politics during college and law school, he returned to his roots by becoming a healthcare real estate (HRE) broker.
During productive stints with The Staubach Company, Cushman & Wakefield and CBRE (NYSE: CBRE), Mr. Lewitt joined the Los Angeles office of Jones Lang LaSalle Inc. (NYSE: JLL) in May 2018 to become managing director, healthcare, and the Southern California practice leader for JLL’s Healthcare Services Group. During his 30-plus-year career in the HRE space, he has completed transactions exceeding $1.5 billion.
Now, with about one year under his belt since moving to JLL, Mr. Lewitt was recently asked by Healthcare Real Estate Insights™ to reflect on that transition, as well as his career and his views on the current state of the HRE business.
‘I never thought I’d get into healthcare’
Mr. Lewitt is a lifelong resident of the Los Angeles area. His father, Maurice, is a Los Angeles attorney and M.B.A. who, together with a partner, formed a public company called SETCO in the late 1960s to buy, build, own and operate acute general hospitals and ancillary service entities. The hospital – now known as Providence Tarzana Medical Center – that employed the younger Mr. Lewitt as a high schooler was one of those developed and owned by his father.
After high school, Mr. Lewitt earned a B.S. in pre-law from Saint Mary’s College of California in 1980 and a law degree from the University of the Pacific – McGeorge School of Law in 1985.
“I never thought I’d get into healthcare,” Mr. Lewitt recalls. “I thought I wanted to go into politics… I worked on campaigns when I was going to law school.” But he said he became disillusioned with politics – and law.
“I went to law school thinking I might go into healthcare law, but that was kind of dry for me,” he says. So in 1989, after working for a few years as an attorney after graduation, he got his commercial real estate broker’s license. He worked for a few years for some local firms “and kind of made my way up to The Staubach Company, which was a great company at the time,” he says.
Formed by former Dallas Cowboys quarterback Roger Staubach in 1977, The Staubach Company had become one of the hottest names in commercial real estate brokerage, eventually growing to more than 1,500 employees in 68 offices across the Americas.
“That’s how I got involved with Roger, really, Mr. Lewitt tells HREI™. “I was selling a hospital and The Staubach Company said, ‘We have some healthcare clients and we could really use some help in the healthcare brokerage side.’ So, in the mid-‘90s, I started to work for them and worked on some healthcare accounts.” That work was limited to the tenant representation side of the business, working with hospital systems and medical groups.
In 2005, Mr. Lewitt moved to Cushman and Wakefield, continuing to do mostly tenant rep work for healthcare clients. While at Cushman, Mr. Lewitt also joined forces with the business partner he still works with, Chris Isola.
“At a certain point, though, I realized I wanted to do everything in healthcare,” he says – not only tenant rep work, but also brokerage and other services.
“CBRE had a great platform at that time,” he says, and the duo joined CBRE in 2010. “They realized that healthcare is a great vertical to focus on, so they needed a brokerage leader at the time, and we had a team, so they recruited us over… to grow their presence.”
‘A lot more interesting’
“So then we could go and we could lease buildings and we could sell buildings and we could refer to property management. You really were in the real estate business,” he says, as opposed to doing only tenant representation. “That made it a lot more interesting. You’d help you clients a lot more than just helping them on a lease deal.
“At CBRE, we met people like Chris Bodnar and Craig Beam and Jim Hayden and Kevin O’Neil, Mike Denney. They had a lot of talented people at CBRE doing a lot of things in healthcare. I saw the business grow a lot, the outsourcing. And our business grew here locally as well.”
One of the more colorful transactions during Mr. Lewitt’s almost eight years with CBRE was when the group represented the Motion Picture & Television Fund (MPTF) in the sale of one of the largest off-campus single-tenant medical buildings in Burbank, Calif., in November 2016 for about $14.3 million. The buyer was Worchell Hollywood Properties and the facility was 100 percent leased by UCLA Health.
Mssers. Lewitt, Isola and Bodnar, along with CBRE colleague Lee Asher, represented the seller, which is a non-profit public benefit corporation serving retired actors and other entertainment industry veterans. Founded in 1921 as the Motion Picture Relief Fund, the organization serves more than 150,000 people each year with healthcare, services and retirement living. MPTF operates the Wasserman Campus retirement community in Woodland Hills, Calif., and UCLA Health operates six MPTF health care centers in Los Angeles exclusively for those affiliated with the entertainment industry. Residents of the MPTF retirement community have included such Hollywood luminaries as Star Trek’s DeForest Kelley, Zsa Zsa Gabor, and Abbott and Costello, among others.
“It’s quite a place. It’s really amazing being with the people who have such rich history in the entertainment industry. The Three Stooges were there, for example,” Mr. Lewitt says with a laugh.
But aside from that brush with fame, Mr. Lewitt says it was business as usual as he and Mr. Isola built their team to five professionals at CBRE, “and then we just left in the last year to JLL. Chris and I are partners still.” Mr. Isola is now an executive VP, healthcare, for JLL.
“Then we picked up a partner in Orange County, Kellie Hill,” Mr. Lewitt says. “She was a manager at CB and she wanted to get into brokerage, and she liked our team and she liked healthcare. So she joined us three years ago. And then we had a couple other junior brokers that came with us as well.”
Asked why he and his team made the jump to JLL from CBRE, Mr. Lewitt says, “JLL had a similar platform as CBRE. They had these great accounts and they had great lines of business and a great platform and good leadership.
“CBRE was great company, too, and had similar type of people,” he adds, noting that those two companies were the only ones they felt had “the full platform where we could really fulfill our potential.”
But while JLL had expanded its healthcare team into other regions of the United States, “they had a pent-up demand for real estate brokers in this area,” he says, referring to the Southwest in general and the five-county Southern California market in particular.
“They had these great accounts – Adventist and Dignity and United Healthcare. So they had everything except a brokerage team. So they were pursuing us for a while and we finally realized that this is a great place to work.”
Mr. Lewitt says it has been a smooth transition – in part because JLL had acquired his previous employer, The Staubach Company, in 2008.
“It’s the old Staubach Company,” he says. “I felt at home when I got there because the culture was still pervasive at JLL – that Staubach culture. And some of the people were still there, like the head of the office, Tony Morales.” Mr. Morales is now international director – tenant real estate advisor for JLL.
“It’s been a great transition,” Mr. Lewitt says. “The lines of business and the accounts were very open to us, and the culture was really good. It’s a very sharing culture and a lot smaller brokerage-wise in Southern California than CBRE. So we’ve grown our business since we got here by about 30 percent already.”
JLL’s Southern California healthcare team’s business is split about 50-50 between brokerage and representation, Mr. Lewitt says, with about two-thirds of its business focused on medical office buildings (MOBs) and about one third on senior housing.
The group’s brokerage clients range from the publicly traded healthcare real estate investment trust (REIT) Welltower Inc. (NYSE: WELL) to the private real estate development and investment firm GPI Companies to an undisclosed family office, among others.
Of Los Angeles-based GPI, Mr. Lewitt says, “We have three listings with them with 350,000 square feet.” Some of those include the medical portions of 2601-2625 W. Alameda Ave., a two-building, 95,703 square foot office and medical complex in Burbank, Calif.; and The Campus on Villa La Jolla, a five-building, 198,518 square foot medical and mixed-use complex, in La Jolla, Calif.
“And we represent a family office for a building in Orange County which we’re now selling – we leased it, now we’re selling it – in Huntington Beach,” he says. “And then we just recently picked up a portfolio with Welltower.”
One of those Welltower listings is the 51,333 square foot Lyons Professional Building at 24355 Lyons Ave. in. Santa Clarita, Calif.
“Then on the tenant side, we’re working with Dignity and Adventist West in this area, as well as Antelope Valley Hospital,” Mr. Lewitt says. For those providers, he says, JLL is providing tenant representation as well as some outsourced real estate services.
Despite the sizable population of Southern California, Mr. Lewitt characterizes the local HRE scene as a “middle market… It’s very diverse in its economy and healthcare is like that, too. No major player has more than 20 percent of the hospitals or medical groups or senior housing facilities.”
He adds that the lack of a dominant provider, cultural diversity, urban sprawl and the absence of significant mass transit in the area “create pockets of isolation.” Combined with an often-protracted entitlement process, as well as local regulations that are “behind the times” and aren’t always pro-growth or healthcare-friendly, he says that HRE opportunities can be limited in Southern California.
Even so, he says his team has plenty of projects in the pipeline.
Clients are moving off-campus
“There are some interesting projects we’re working on,” Mr. Lewitt says. JLL’s Southern California healthcare group is helping an undisclosed family office to convert to healthcare use a 45,000 square foot Ross Dress for Less retail store in West Los Angeles. “So we’re marketing it to the large players on the West Side.”
JLL is also marketing to potential healthcare users a variety of retail pads and outlying buildings at the 1.2 million square foot, Nordstrom-anchored Montclair Place regional mall along U.S. Interstate Highway 10 (the San Bernardino Freeway) in Montclair, Calif. The mall, which is about 4 miles east of the 412-bed Pomona Valley Hospital Medical Center, is owned by Los Angeles-based CIM Group, a vertically-integrated owner and operator of real assets for its own account, and on behalf of its partners and co-investors.
“And UCLA Healthcare has gone into some retail centers, and so has Cedar Sinai Medical Center,” he says, “and it’s been a big success for them.”
And just as Southern California retail landlords have hired JLL to market space to healthcare tenants, Mr. Lewitt says, healthcare providers have hired them to represent them in searches for retail locations.
“Our (healthcare) clients are definitely pushing us off the campuses and into retail locations,” he says. In part, he says, that’s because Southern California is “very underbuilt” with “very few large blocks of contiguous space for medical users.” But he says healthcare providers have also recognized the advantages of retail locations, including closer proximity to their current and potential patients, easier access, and ample parking.
“Also, you’re not buried in a medical building where you have no exposure to the public, so it’s a great branding opportunity,” he adds.
Mr. Lewitt says that another hot market in Southern California is single-tenant net-leased HRE, particularly spaces for kidney dialysis providers with “great credit,” including Fresenius Medical Care (NUSE: FMS), DaVita (NYSE: DVA) and US Renal Care.
“The developers are bending over backward to get tenants like that,” he says.
In addition, Mr. Lewitt says sale-leasebacks are a big potential opportunity for JLL.
“Eighty-two percent of the healthcare on hospital campuses is owned by the hospitals in Southern California,” he notes. “We’re working a lot with our JLL Capital Markets folks, Mindy Berman and Justin Hill, on some sale-leasebacks. I see that trend increasing.”
He notes that many Southern California hospitals are still independent – not part of a health system. As those “one-offs” are acquired, and with the relatively high cost of Southern California real estate, he says, it should create more opportunities for sale-leasebacks.
Lessons in perseverance
In addition to his work with JLL, Mr. Lewitt has served on the boards of, among others, the California Hospital Medical Center Foundation and Providence Tarzana Medical Center – the very same hospital where he did maintenance work and delivered medications as a teen.
So when asked by HREI™ who his greatest mentors and role models have been, it is perhaps not surprising that Mr. Lewitt is quick to name the individual who got him that first healthcare job 40-plus years ago.
“My Dad is my role model,” he says of his now 88-year-old father. “He emigrated penniless from Paris, France, at the age of 16 after World War II. He learned English, graduated from law school and started a substantial hospital chain.
“He showed me the quality of perseverance and to be relentless. The ability to be knocked down and to get right back up is the most important trait for a commercial real estate broker. He never dwelled on his horrible past and just looked forward. So when bad things happen that are out of your control you must move on.”
Continuing the discussion of mentors, Mr. Lewitt points to another individual mentioned earlier in this article.
“I’ve been fortunate to have a few mentors in my real estate career but the biggest one is Roger Staubach,” he says. “My first break in the business was with The Staubach Company in the mid-‘90s here in Los Angeles. Roger taught me to be a team player by putting the client first and don’t be ‘a fee and me broker.’ He also is very involved in his community and always did the right thing.
“Even though I’m a Rams fan, Roger is my guy.”
When asked by HREI™ which books have made the greatest impact on his life, career or both, Mr. Lewitt replies, “You can learn a lot about business from history books.
“I enjoyed ‘Team Of Rivals’ by Doris Kearns, which is about Abraham Lincoln wisely choosing his cabinet based on what was best for the country and not necessarily for his party or his career. His team dealt with one of the most important crises of our country.
“I also enjoyed ‘Eisenhower: Soldier and President’ by Stephen E. Ambrose about Dwight Eisenhower during World War 11. Again, he built his team away from politics in order to have the best and brightest minds to free France and the world from the Nazis.
“I also enjoy reading business books. I like the Stephen Covey books. Recently, there have been some excellent commercial real estate books published. My favorites are; Rod Santomassimo’s book ‘Commercial Real Estate Teams Built to Dominate’ and Blaine Strickland’s book ‘Thrive: Ten Prescriptions for Exceptional Performance as a Commercial Real Estate Agent.’
“When I’m not reading and working, I enjoy the outdoor life of Los Angeles,” Mr. Lewitt continues. “We’re blessed with great weather here, so I’m outside a lot. I hike different trails or bike on the beach, play golf and paddle tennis. And I also walk my dogs with my wife, Randi. We have two cocker spaniels. They’re high maintenance, but they’re good family dogs.
“When my kids are available we will play tennis as they, like me, were high school tennis players. “I have a son, Blake, who is a junior at Oregon and a daughter, Amanda, who is a senior in high school and will attend the University of Arizona in the fall. Randi and I are looking forward to our next adventure in being empty-nesters.
“I am also proud of my nephew, Evan Lewitt, who also works at JLL on the Capital Market’s side, as well as my niece, Julia Lewitt, a rising real estate lawyer at Allen Matkins.”
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