Howard Patterson necrology (October 2006)

An ‘old dirt guy’ through and through

HOWARD PATTERSON, 57, WAS KNOWN AS HCA’s REAL ESTATE GURU AND A GOOD GUY

By John Mugford

 

For several years, the corporate real estate team at the country’s largest hospital owner, Nashville, Tenn.-based HCA Inc. (NYSE: HCA), bestowed an honor upon an employee in its property management division. The honor, which is given for leadership, achievement and integrity, had been dubbed the Eagle Award for several years.

About three years ago, however, the name on the plaque was changed to the Patterson Award; as in Howard Patterson, a man whom HCA officials say exemplified those very attributes on which the award is based.

As in Howard Patterson, who was involved in healthcare real estate since 1981 – at first with Humana Inc., which was once the largest hospital company in the country, and then at HCA, which brought a merged Humana and Columbia Healthcare Corp. under its umbrella in 1994.

As in Howard Patterson of suburban Franklin, Tenn.; a family man, loyal friend to many, Civil War buff, proud alumnus of Western Kentucky University and a golfer.

As in Howard King Patterson, 57, who died Sept. 11 from a brain tumor and is survived by his wife, Vicky Cofer Patterson, four children and four grandchildren.

Mr. Patterson first suffered from a brain tumor about nine years ago, at which time he underwent successful surgery followed by a difficult and arduous recovery process. And while his balance and hearing suffered as a result, Mr. Patterson’s enthusiasm for his job, his colleagues, and for matters involving real estate did not, according to several people who knew and worked with him.

Mr. Patterson’s official title at HCA was vice president of Corporate Real Estate and he was knowledgeable about most endeavors involving real estate acquisitions and dispositions, the development of hospitals and medical office buildings (MOBs), and property management.

More than a ‘dirt guy’

“Howard always called himself an ‘old dirt guy,’” says Bruce Moore, group president of Outpatient Services at HCA and someone who worked closely with him since 1998. “And while that is a nice term to use, he really was so much more than that.

“Real estate is such an integral part of the business for HCA and Howard knew the fundamentals as well as anybody. He really was the face of corporate real estate for the company because of his history, knowledge and loyalty to the organization and those he dealt and worked with.”

For example, Mr. Patterson – even after brain surgery back in the late 1990s – could remember intricate details about developments, property management contracts, tenants, and real estate transactions from years, even decades, earlier.

“I’d be asking him about a certain transaction and he’d say something like, ‘Well, 20 years ago Dr. Smith was a tenant in the building,” Mr. Moore says. “He loved history and had a great memory.”

Mr. Moore notes that it might be a toss up as to who prevailed most often when it came to business discussions and decisions – even though, technically, Mr. Patterson reported to Mr. Moore. However, when it came to history and facts from long ago – be they concerning HCA or otherwise – there was no doubt about who typically came out on top of the argument.

“That’s undisputable – it was Howard,” Mr. Moore says with a laugh.

At a company with more than 180 hospitals and more than 90 medical office buildings and outpatient facilities, Mr. Patterson certainly had plenty on his plate. The property management team, which Mr. Patterson was responsible for, oversees about 12 million square feet.

In addition to overseeing a variety of acquisitions and developments over the years, Mr. Patterson was in charge of implementing HCA’s disposition of about 6 million square feet of MOBs back in 2000. After doing plenty of due diligence headed by Mr. Patterson, HCA eventually sold a portfolio of 106 facilities to a spin-off company, MedCap Properties LLC for more than $300 million. MedCap was acquired by a joint venture of Health Care Property Investors Inc. (NYSE: HCP) and GE Commercial Finance for $576 million in 2003.

“That was quite an endeavor,” says Tom Gormley, a former colleague of Mr. Patterson’s at HCA who now heads a new healthcare real estate division for construction and real estate giant Fluor Corp. (NYSE: FLR). “HCA had something like 18 million square feet and they sold 6 million square feet of that, with Howard taking the lead and doing a heck of a job.”

Mr. Patterson was also a charter member of the 12-member Editorial Advisory Board of Healthcare Real Estate Insights^™.

“He was good guy who was always accessible and willing to share his views,” says fellow HREI^™ Editorial Advisory Board member Jonathan Winer, a managing director with Ernst & Young in New York.

“We were honored to have Howard on our board and appreciated his contributions,” adds Murray W. Wolf, HREI^™ publisher. “Our next board meeting is scheduled for Nov. 16, and it’s difficult to accept that he won’t be there with us. He will be missed.”

A uniform system

Mr. Patterson also received kudos from former and present colleagues for implementing HCA’s “uniform property management initiative” back in the late 1990s, according to Mr. Moore. At the time, the federal government was investigating the MOB lease rates that HCA and other health systems were charging their doctors. The investigation was part of an effort that eventually led to the passage of the Stark Laws.

“Howard oversaw the implementation of a company-wide, computerized property management system that tracked lease rates and made sure they were market-rate. He was responsible for bringing that whole idea into the 21^st Century,” says Mr. Gormley of Fluor. “Before then, at any large health system or hospital company, it was nearly impossible to get that kind of data except for taking a look at it on a hospital-by-hospital basis.”

“He came up with a system that is basically still in use today,” adds Mr. Gormley, who was HCA’s vice president of design and construction for 10 years before joining Fluor in 2005.

One of the attributes that colleagues, clients and others who worked with Mr. Patterson appreciated most, according to Mr. Moore, was his candor when doing deals involving healthcare real estate, property management and development. While he had a great sense of humor, Mr. Patterson, whom some called “brilliant” when it came to real estate, liked to cut right to the chase when informing someone about his business decisions.

“Howard would listen to what someone had to say and then say that the deal could or couldn’t be done,” Mr. Moore says. “When he said a deal couldn’t be done, he’d also say, ‘We can’t do that deal and here’s why.’ Then he’d add something to the effect, ‘But here’s what we can do.’ Howard loved the business and loved real estate, and one of the things he loved most about it was solving problems.”

A corporate guy

In a day and age when the word “corporate” seems to carry a negative stigma, Mr. Patterson actually gave the word a good name, Mr. Moore says.

“His goal was to do what was right for everyone involved, including the organization, which he was very loyal to,” Mr. Moore says. “This was a guy who actually, truly wanted transactions to be win-win and fair for everyone involved.

“As a result, people who dealt with Howard knew they could trust him, even though he was the guy from ‘corporate,’” Mr. Moore adds.

As for the recently renamed Patterson Award, Mr. Patterson did not know that his colleagues were considering renaming the Eagle Award in his honor.

But then, to his surprise as he sat at HCA’s annual meeting about three years ago, officials made the announcement about the award’s new name.

“Howard was humbled and actually, for one of the few times I have seen, speechless,” Mr. Moore said during a eulogy in which he told several funny stories about Mr. Patterson’s sense of humor and knack for making people laugh. q