Leading with “clinical” expertise, the man who founded the Medical Practice Group for Cresa New Jersey is introducing his own advisory firm.

After building the specialty practice at Cresa, former Managing Director Jonathan Marks has launched Clinical: Medical Real Estate Solutions.

The new, Hackensack-based business aligns clinical strategy, operations and real estate for a client base comprised of physicians, medical groups, hospitals, management services organizations and investors. Revealing the launch to NJBIZ exclusively, Marks spoke about what lies ahead in both the near- and long-term for the new business.

He noted the expansion of the medical practice – and market – over the past 12 years as he built the medical practice at Cresa, and the opportunity it presents for specialized medical real estate. So, Marks built a business “that was medical real estate made simple, where health care led the conversation and strategy.”

Clinical offers services including portfolio optimization, strategic site selection, competition analysis, clinical space programming, medical office leasing, acquisitions, dispositions, build-to-suits and medical buildouts.

Medical real estate focus

“There’s brokers and there’s people that run portfolios, but to align clinical strategy, operations and real estate really matters when the typical operating margin for a hospital might be 1% to 3%, and the real estate aspect makes up 8% to 12%,” Marks said. Those tight margins mean you need to be more strategic with site selection, space programming and using data to determine where to find opportunity.

Clinical says its ability to tackle sector-specific challenges can offer clients streamlined operations, reduced costs and mitigated risks at clinical facilities.

“A lot of people are in the real estate business that happen to do medical,” Marks said, explaining, “I’m more in the medical advisory business …” And that specialization and clinical focus give the company an edge.

Marks estimated the majority of brokers in medical probably do about 20% of their business in the space. Clinical is 100% in.

“And I think part of our model that’s going to make a lot of sense is, we really run the front end on the clinical strategy of looking at a strategic site selection, competition analysis — really seeing where the right opportunities are, portfolio optimization,” Marks said. The relationships he’s built with the brokerage world also serve as a boost for the new business. He said he still expects to partner in certain areas with real estate professionals in his new endeavor.

“I think we’re synergistic within the real estate versus competitive; that we’re really the front end of the real estate funnel and the strategy funnel,” Marks said, adding later, “We want to make sure for our clients when running their portfolio, we are going to quarterback it, but we’re going to make sure that the best the team is on the field.”

Room to grow

With Clinical, he said things will likely start with a similar and heavy focus in the tri-state region; but that’s not where they’ll stay. In the future, Marks said he plans to expand to other major medical markets and areas nationwide, including Texas and Tennessee. He also has plans to build the team behind the scenes.

“We do look to expand it aggressively,” Marks said of the venture.

Appointed to the local leadership role at Cresa in 2007, Marks has negotiated more than 2 million square feet of clinical space with values approaching $1 billion throughout his career. That includes for well-known clients such as Regional Cancer Care Associates, Axia Women’s Health, New Jersey Brain and Spine, and others. Over his tenure with the occupier-focused global commercial real estate advisory firm, Marks added market share in New Jersey, New York, Pennsylvania and other areas nationwide.

He noted the “tremendous expansion” in the sector in recent years.

“We haven’t seen much slowdown for the specialty groups — we represent oncology, neurology; we’ve done some pretty expansive deals over the past year.

“We had a record year and we see things stable and growing and I think the expectation is roughly around 18% of the market today is health care and over the next seven years to increase to roughly 20%. So we’ve seen constant and steady growth, continued consolidation, but nonetheless continued growth within the health care space,” Marks said.

Specialty service

At Clinical, he intends to offer a full-spectrum experience.

“You’re helping find the space, negotiate it, but then building it out. So from A to Z, we’re running the entire process for physicians, med groups, hospitals – completely integrated. … Everything is basically sourced, managed and run, and led non-broker – led by clinical – to really efficiently and effectively run major real estate portfolios for medical groups, hospitals, physicians, and then obviously MSOs and investors as well,” Marks said.

You wouldn’t go to your primary care physician for brain surgery. In the same vein, it makes sense to turn to a specialist when it comes to the specifics of where either of those practices may be based, or the larger investments they may represent.

“I think that the traditional model has always been broker led and dealing with the executives and operations. Having a specialized team that is very service oriented about streamlining their operations and portfolio versus solely on the real estate is beneficial to the physicians, medical group, hospitals. And having this specialization and the best team on the field is really going to help to streamline that, reduce cost, mitigate risk, and put them in the best position to … operate their facilities and provide world-class services to their patients.

“The doctors understand referring to a specialist,” Marks said, “we’re that specialist in real estate, and rather than going to a generalist, Clinical is a specialist and really kind of a major player in the market that looks forward to continued growth.”