Marin County veterinary hospital plans big expansion under new owner

Pet Emergency & Specialty Center of Marin has new owners with a bold expansion plan that includes what they say is a lower-cost option for treating after-hours animal ailments that aren’t life-threatening.

Founded in 1998, the business, Marin County’s only emergency veterinary care facility, has passed through several owners in the past few years.

In June 2019, Boston area-based Ethos Veterinary Health, with nearly two dozen hospitals, acquired the San Rafael veterinary facility for an undisclosed amount, per the law firm that brokered the deal. Its only North Bay facility was in Marin County.

In August of last year, private equity–backed National Veterinary Associates, with 1,200 hospitals, purchased Ethos in a $1.65 billion deal, according to private-equity deal news service PE Hub. Ethos continues to operate under its name.

And most recently, in July the Marin County hospital and one in the Denver area passed from Ethos to New Jersey-based Veritas Veterinary Partners, a private-equity backed group of clinics in the Garden State, New York City, Las Vegas and Colorado. Terms of that deal weren’t disclosed.

“We're about providing great-quality veterinary care to our patients, good service to the clients who own them,” Veritas President and Chief Operating Officer Christopher Sclafani told the Business Journal. “They were a good match in that regard. It's a great community.”

The changing of hands for the Marin County veterinary hospital is part of a movement of independent facilities to corporate ownership nationwide, according to a pet industry-oriented consumer advocacy venture run by Arizona-based Watchdog Media Group. Corporate ownership of vet practices rose to 18%–21% by 2020, and that share is expected to grow to one-quarter by next year, based on a trade survey and industry analysis by Brakke Consulting, the group reported.

But another trend among the large corporate veterinary hospital owners is to start offering urgent care services, particularly in standalone facilities. Among the companies doing that, though not in the North Bay, are Ethos and VCA Animal Hospitals. VCA operate emergency care facilities in Sonoma County plus primary care offices there and in Marin and Solano counties.

Veritas is eyeing something similar for the 13,000-square-foot San Rafael hospital, located at 901 Francisco Blvd. E., Sclafani said. A couple of months ago, a portion of the hospital was set aside for cases that don’t require emergency care.

Sclafani himself came to Veritas earlier this year after three decades in human health care management, but he said the customer-service principles of human and animal care have similarities, particularly in post-operative or other situations when the patient isn’t able to communicate.

“If (an animal) patient shows up with more of an emergency, we will be able to move the patient to the hospital,” Sclafani said, noting that educating pet owners about the difference in after-hours services will take time. “Nowadays, people have a better knowledge base about what is more for urgent care than emergency care, but it has taken a decade to get there.”

An emerging trend toward veterinary urgent care follows a similar move in human health care in the past 15 years, as human patients have had challenges in getting appointments with primary care physicians, Sclafani said. Now, the nation is facing a shortage of veterinarians, resulting in closures of hospitals or curtailing of clinic hours, according to news reports.

Meanwhile, Veritas’ San Rafael vet hospital has been upgrading its expertise and equipment for enhanced services in cardiology, radiology and ophthalmology. The goal is to relocate and expand surgical and advanced treatment options to a newly secured 35,000-square-foot space in north San Rafael.

Before the sale of the Marin hospital, Ethos had signed a lease for the top floor of the 1 Thorndale Drive office building on a hilltop overlooking Northgate Mall shopping center. Veritas is preparing for the submission of an application to the city of San Rafael for tenant-improvement building permits, Sclafani said. He declined to say when the new facility could open.

“The pet population increased pretty dramatically in the pandemic,” Slafani said. “Demand for our services is just increasing.”

The 1 Thorndale building already has a specialty surgery center for humans. Marin Specialty Surgery Center opened in 17,000 square feet on the second floor in 2019, the Business Journal reported at the time.

Whitney Strotz, Trevor Buck and Brian Foster of Cushman & Wakefield represented 1 Thorndale owner Berg Holdings in the vet hospital lease deal. Jack Churton of JLL represented the tenant.

The lease was the single largest deal for office space in Marin County in three years, Buck told the Business Journal.

Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at jquackenbush@busjrnl.com or 707-521-4256.