In the medical office sector, relationships are key.

In fact, when it comes to purchasing institutional-quality medical office real estate, it’s not necessarily about how much you’re willing to pay—it’s about who you know, according to Robert Milligan, CFO at Healthcare Trust of America, Inc. (NYSE: HTA).

“Many of the institutional-quality assets that are really out there have sellers and tenants that care almost as much about who’s going to own the building long-term and how they’re going to operate it, as what kind of price they’re going to ultimately get for it,” Milligan said during a Dec. 15 webinar put on by Irving Levin Associates.

New players entering the medical office space tend to either capitalize on their existing relationships with local hospitals or health systems, or they partner with “folks that have been in the industry for a while” like Ventas Inc. (NYSE: VTR) or CBRE (NYSE: CBG), Milligan explained.

In that sense, relationships tend to take precedence.

“In the medical office sector, you do need to have more connections, a platform and a commitment to the space to remain relevant to your tenants,” Milligan said.

Ventas Investment Officer Shane Seitz knows this first-hand.

“I haven’t always been the highest paying buyer, but [I’ve won deals] because of my platform and because of the relationships that I have,” Seitz said during the webinar. “They know that [Ventas is] going to be there for the long-term.”

A long-term vision for the property can make or break the deal, CBRE Executive Vice President Chris Bodnar agreed.

“When you’re handing over the keys to a medical building for someone else to own, you’re handing over part of that relationship with the physicians… and they want to make sure that they have an owner that can trust and depend on,” Bodnar explained. “In most cases they don’t want someone coming in who’s going to flip the real estate to somebody else.”

Written by Mary Kate Nelson