Getting Ahead Of The Curve - Rance Sanders Of The Sanders Trust

Rance Sanders and his company The Sanders Trust were one of the pioneers of health care real estate, an industry that has been booming as the health care landscape quickly changes nationwide.

The company, which included early partners such as NFL quarterback Bart Starr and famed surgeon Dr. James Andrews, has a presence in more than 20 states, and aims to add between $100 million to $200 million per year to its portfolio of health care properties. But Sanders cut his teeth in real estate working on several historic renovation projects in downtown Birmingham decades before the current boom of such projects.

Sanders recently shared with the BBJ his thoughts on local leadership, reasons why seemingly everyone wants to get a piece of the health care real estate market, and his secret identity as an amateur DJ.

How did you get started in health care real estate? In 1989, after doing historic renovation in downtown Birmingham, Bart Starr’s son was a roommate of mine, and he told me his dad was about to move back here from Phoenix. I had evaluated the market and wanted to turbo-charge what I had been doing with historic renovation and new construction, so I pitched to Bart Sr. that we could be one of the pioneers in health care real estate, and it turns out we were. Bart was a good door-buster, and we got Dr. (James) Andrews as our vice chairman. We did a lot of new development in Texas, in Florida and other places. We had offices from Miami to Los Angeles, and had over 100 employees. It grew so much that I was spending most of my time on personnel, and I wanted to focus on just pure investment. So we evolved the company in the mid 90s and re-branded as The Sanders Trust.

What were some of the historical renovations you were involved with? When I was 26, I put the Farley Building under contract. It was in disrepair. It’s at (20th Street North) and Third Avenue, it’s a nine-story building. I would never do that deal today, but being a kid I didn’t know any better. I found a contractor, Pat O’Sullivan. I said here’s my vision for what we can do here. I just brazenly walked in and bought it from the owner. We renovated it and it was successful and we filled it up. We sold it after two years. My check in 1987 was more money than I’d ever seen and I thought, “I like this!” The Massey Business College was one I renovated, it’s also on Third Avenue. That was for the state of Alabama, so we had a tenant in hand there. I think they stayed there for 20 years or so and then left.

If you could have any other job, what would it be? I would be a disc jockey. I’m sort of an amateur DJ. I have playlists that I create on iTunes for everything. I really pour myself into it. Whether it’s for having coffee or cocktail hour or when you come home after dinner or traveling – you name it, I have a playlist for it. It ranges from the standards, Sinatra and Dean Martin or Bobby Darin to Mozart to Pitbull. I love Pitbull, I think he’s one of the most entertaining guys out there. Nicki Minaj; I love Katy Perry. I love young music, I love old music and I would love to be a DJ. My wife calls me the “Master Blaster.”

What’s the biggest challenge of your industry? The amount of capital that is poured in. There’s so much money that’s coming in that it’s harder to find new opportunities. We see several deals a day every day, and we have a good reputation for going after them. But what worries me about the industry is what I don’t know. Risk is something that you can’t see. If you knew it and anticipated it, It wouldn’t really be risk. It’s not interest rates, it’s not cap rates, it’s a disruptive force that I don’t know about. Maybe it’s technology and the person doesn’t have to go see their doctor anymore. I don’t know what it is, but it’s what is unseen.

What is one thing that keeps you up at night? I sleep pretty well. I’m a happy person. But I am a risk manager, to the point that it drives my wife crazy. I see little things that can happen around the house or at the office – “If you don’t move that glass further from the edge of the table it could fall and then you cut your foot in the carpet” – that kind of thing. I think that’s served us well in our investments, because we twist and turn a deal every which way and have done so for 26 years, that we know what can go wrong with a deal. At home, I do think about certain deals and about lease rollover or if we hedged interest rates properly, things like that.

Do you have any plans for future deals in and around Birmingham? Boy, we would like to. We really would. It’s ironic that we’ve done so little in Birmingham and we’re located here. Historically we’re not as well known in Birmingham just because we’re not building here. But we’ve got relationships with a few of the CEOs and we’re optimistic that we’ll do a significant project in Birmingham in the not-too-distant future.

Brent Godwin is the commercial real estate reporter for the Birmingham Business Journal.