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October 2008
From the Ground Up
By Thom Callahan

     When Diane Brackett Rivers arrived in Charlotte in 1982, she had job security working as a property manager and was establishing her name in the world of real estate.

     Three years later, while working on a project with Mercy Hospital South, what is now Carolinas Medical Center Pineville, Rivers took a risk. A big one. Hospital administrators decided further development was needed, but the company that employed Rivers would not allow her to pursue it.

     “They said, ‘We have guys for that,’” Rivers chuckles.

     Rather than resign herself to what her employer felt then was a gender-specific role, Rivers resigned and decided to forge her own business using her maiden name, the Brackett Company.

     Since 1985, the Brackett Company has developed nearly 30 projects totaling more than 1 million square feet. It focuses in the health care sector of commercial real estate in greater Charlotte, offering commercial real estate development, leasing, brokerage, property management and accounting and construction management.

     Looking back 23 years, Rivers remembers awaiting the board’s approval to handle the hospital’s future development: “It wasn’t easy because it was not the hospital administrators’ decision whether I did that development, but a board decision. So I paced the floor for two weeks, bought a computer and a telephone, and worried.”

     The board did approve Rivers and appointed the new company as its property manager. At that time, the hospital was still under construction and its campus comprised an urgent care center and three medical buildings.

     Rivers’ success did not come without trials. As with most new businesses, there were lean times and the usual competitive challenges. More specifically, however, she once again encountered reluctance by her counterparts to accept her into the predominantly male building and development work force.

     “At that time, in 1985, I was about 35 years old, 5 feet 2 inches tall and probably weighed 105 pounds,” Rivers says. “I would go to meetings with contractors and they’d talk to anybody but me. What they didn’t realize was that I was the one who would be signing their check.”

     Thankfully, times have changed. Through hard work and remaining steadfast to get the Brackett Company off the ground, Rivers has earned a solid standing in commercial real estate and adds, “I’ve made a lot of friends and worked with good architects and contractors.”

 

Laying the Foundation

     No doubt it is daunting to leave the comfort of steady employment and strike out on one’s own. But Rivers had success early on, particularly with leasing and property management. She took that savvy, along with the experience she garnered working with other developers, to further her own company.

     When she first came to Charlotte, Rivers managed a 10-story doctors building, since torn down, next door to Carolinas Medical Center. The lease occupancy then was about 50 percent.

     The building was sold and slated for renovation. The buyer hired a local commercial real estate company to manage the property. That company was asked by the buyer to hire Rivers to oversee the renovation and lease up the property.

“We were very successful and leased the doctors building to almost 100 percent,” Rivers asserts.

     During this time, Mercy Hospital South was getting underway in Pineville and awarded its leasing contract to the company that employed Rivers. Rivers leased the hospital’s existing three 12,000-square-foot medical buildings, which prompted the need for further development and Rivers’ subsequent exit from the company.

     University Memorial Hospital was just opening and Rivers’ former company also was awarded its leasing contract. After the Brackett Company was founded, Rivers was granted the contract to finish that leasing.

     Success was taking shape for Rivers; she was proving her mettle as a business owner. She admits she had self-doubt in the beginning and worked arduous hours, mostly solo. Her father was one of her biggest supporters.

     “When I quit my job, I remember calling my dad asking, ‘Is this a crazy thing to do?’”

     Her father reassured her it was not, that he would help her financially with household bills while she got her company up and running.

     “And I did have to call on him financially a couple times in the very beginning,” Rivers recalls.

     It was a major setback when Rivers’ father died in December 1985, just six months after she started the company.

     “I had lost one of my most valuable supporters,” Rivers says. “But at that point I was too far into it; I had obligations and couldn’t back away. So I toughed it out.”

 

Building It Up

     Fortunately, Rivers got a windfall in Cotswold, where she set up her first office—two rooms at the Williamsburg Building. The building’s owner was moving to Charleston and asked Rivers to look after it and handle the leasing. In return, Rivers paid no rent for her own space and was given the building’s secretary with her salary paid.

     “So basically I had a free employee and office,” Rivers remembers. “And that secretary, Barbara Brown, went on a few years later to start her own commercial real estate business and has done great things in Charlotte.”

     Profit for any new business typically is a long time coming. There are dues to pay figuratively and literally. Rivers acknowledges it was no different for her.

     “In the development business, it takes a long time to get paid,” Rivers recognizes. “From the time you know you’re going to do a building, it can be two years before you make any money. Odds are it’s going to be at least one year.”

     Rivers lists some of the issues that have to be addressed—drawing plans, budgets, getting contractors in place, value engineering, permits, zoning.

     Just two years after starting the Brackett Company, in 1987, Rivers and a group of physicians developed a large medical building at 2015 Randolph Road, still in operation today. Other developments by Brackett include Eastover Medical Park III, The Streets of Toringdon Medical Park and Cotswold Plazas I and II.

     “I was the first person to develop anything medical in Cotswold,” Rivers says. “If you want to be absolutely sure a project is going to be a slam dunk, then you put it somewhere close to these hospitals.”

     Rivers adds that her company’s focus on the health care industry came about from her earlier days in real estate and just tended to continue.

     “I got to understand what physicians wanted and needed when I was managing the doctors building,” she comments.

 

In the Mix

     Along with Brackett’s local presence, the company’s developments include properties in Cornelius, Huntersville, Ballantyne and Lancaster, S.C. Other projects in process are another Toringdon development, a SouthEnd development and another Cotswold development.

     Brackett currently has 22 properties in its  leasing and management portfolio, with a planned groundbreaking for the three new developments in the next few months, Rivers confirms.

     Regardless of the number of projects, Rivers concedes, “If I’m doing a 15,000-square-foot building, it takes every bit as long and as much work as a 70,000-square-foot building because you do all the same steps, just in smaller amounts.”

     The economy undoubtedly influences the ebb and flow of real estate, though Charlotte’s market in general has fared slightly better than the rest of the country according to news reports. Rivers describes medical development here as “fairly steady,” however “construction costs are a different scenario.”

     “Concrete, steel and fuel are skyrocketing,” Rivers declares. “But my biggest problem is finding dirt—in town.”

     Costs aside, commercial medical properties necessitate specific requirements. Examining and operating rooms need to run efficiently and be free from malfunction. And trying to retrofit one space for another is rarely feasible.

     “It is very difficult to put a medical office group in a general office building,” Rivers remarks. “For example, if you put a cardiologist’s office on a second floor, you have to have hospital-sized elevators because they have patients in stress testing. And if they go into cardiac arrest, an ambulance staff has to be able to get in and get them out of there on a stretcher.”

     Though medical offices are responsible for disposing of their own hazardous waste, cleanliness needs to be exceptional in a health care setting, Rivers says. Brackett contracts janitorial services for its managed properties but employs two full-time maintenance workers who are always on call.

     “And we have an answering service, an actual person, 24/7,” Rivers affirms.

     With commercial properties, emergency calls such as for break-ins or storm damage usually occur during the week but sometimes a tenant prompts a call.

     “We had a janitorial service throw away about 25 patient charts,” Rivers recalls. “The doctor called in a panic at the end of the next day. The doctor had stored the charts in an office trash can but they were able to be retrieved from a dumpster before it was picked up,” recalls an incredulous Rivers.

 

Lessons Learned

     Being in business nearly 25 years is testament to Rivers’ commitment and hard work. At one point the company more than doubled it size, “which was too fast,” Rivers recalls, and she allowed another to take on her role as president.

     “It was a big mistake, and that won’t happen again,” she says. “In this business, you have to keep control because there are too many affected by your decisions—employees, doctors, patients, tenants.”

     Brackett’s staff includes Joe Shull, director of property management, Kermit L. Murphy, who handles leasing and brokerage, and partner B. Reed Griffith, who joined right after college. Rivers says Griffith has “developed a good, strong work ethic and has dealt well with doctors.”

     Delegating comes easily for Rivers who credits Brackett’s success to all of her staff. That’s crucial, Rivers acknowledges, particularly when it comes to her clients.

     Interestingly, building and development are playing out in Brackett’s own Uptown office, where walls have been knocked down and rooms enlarged. Rivers had to move from her previous office because her space was needed by another tenant who was expanding. And so is the Brackett Company.

     “We are really slammed for space, and I would like my nice conference room back,” says a hopeful Rivers.

     When she’s not working, Rivers reads and plays the piano, “though not as much as I used to.” Travel and entertaining clients are part of her off-work template as well.

     She and her husband, Don Rivers, whom she met while on the job, have three children: Don’s two sons, Trey and Brandon, and Rivers’ son Ben Cazalas.

     The risk Rivers took long ago paid off. She’s happy where she’s at and plans her business succession.

     “I don’t think I’ll ever retire because I’d go crazy, but I will die someday,” she declares.

Rivers plans to grow her company but with a cautionary note.

     “Our reputation is extremely important to me, and yes we would like to slowly double in size again,” Rivers says. “But we don’t ever want to be too big because that may mean the company may get away from us and the services we provide might be compromised.”

 

Thom Callahan is a Charlotte-based freelance writer.
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