Veterinarians are borrowing big to create palatial pet clinics


To start 2020, Morgan McDaniel fulfilled a lifelong dream: She bought her own veterinary practice, a financial leap that took a $4.5 million loan.

Then the pandemic hit, as did America’s pet adoption boom. Cat and dog parents kept asking McDaniel’s Montgomery Animal Hospital in Pineville, La., for more services. Could it provide long-term care for a dog’s torn ACL? Did it offer overnight boarding?

McDaniel decided she could, tacking on a $750,000 loan to expand her practice by more than two dozen doggy bedrooms, an exam room for specialty procedures and an artificial turf play field. She bought an underwater treadmill for rehab care and had a slushy beverage machine installed as a treat for her 35 employees.

“I dream big, I’ll say that. It seems extreme in some cases,” McDaniel said.

Similar stories can be found across the country as the animal health-care sector experiences stunning growth. Now veterinarians are busting down walls or breaking ground to make room for new clients clamoring for boarding, day care and grooming.

Their balance sheets are getting more complicated, too. In the first nine months of 2022, small-business loans to vet offices spiked 23 percent at PNC Bank, a spokesman said. At Huntington National Bank, vet credit requests have quadrupled in the past four years.

That’s fueled by a surge of pet adoptions, experts say. More than 23 million U.S. households — nearly 1 in 5 — took in a pet during the coronavirus pandemic, according to the American Society for the Prevention of Cruelty to Animals. The share of households with at least one dog jumped from 38 percent in 2016 to 45 percent in 2020, before leveling off last year. Cat ownership went from 25 percent in 2016 to 29 percent in 2022.

For Brian Greenfield and his partners at Animal Clinic Northview, the pandemic pet boom spurred them to accelerate their expansion timeline. The clinic outside of Cleveland added 12,000 square feet of cutting-edge space, including 10 exam rooms, two operating suites, a remodeled intensive care unit, a rehab pool and an underwater treadmill. The project cost $4 million, 75 percent of it in the form of a loan from PNC.

Becka Byrd in San Antonio purchased a plot of land to start a second vet practice in 2018 and opened it in 2021, complete with a “pet retreat and spa.” Boarding suites have flat-screen TVs that display burning fireplaces or play cartoons.

McDaniel’s luxury dog boarding service allows owners to engage with their pets through daily video calls. The clinic’s staff of veterinary technicians and assistants tucks pups into bed each night and gives them nightly treats.

Tommy Monaco in northern New Jersey started his own specialty surgery practice. His wife, Francesca, left her job as a management consultant at ed-tech firm Blackboard to run the business’s finances. Jonathan Trail, in southern New Jersey, added 2,500 square feet of space to his “mom and pop” general vet practice with a $700,000 loan from TD Bank.

“The door stayed open for veterinarians the entire pandemic,” said Brandy Keck, head of veterinary lending at Live Oak Bank. “It became very quickly incredibly evident that the veterinary industry was going to be one of the winners.”

The vet from a ‘pet’s point of view’

Pet expenses, including for health care, are largely considered discretionary. Researchers frequently track consumer expenditures on pet food, toys, training and even surgeries to gauge consumer confidence.

But in the years leading up to the pandemic, loan underwriters began to sense that classification was increasingly unreliable. People no longer view their pets as property, said Ed Nunes, a senior manager at TD Bank who oversees veterinary lending. They see them as family.

There’s also new research that suggests pets were a panacea for many of the stressors associated with isolation, loneliness and poor health habits during the pandemic.

Researchers from the University of Montreal found dog ownership had significant positive health impacts during the pandemic. Owning at least one dog encouraged immunocompromised people to exercise more and sleep better, the researchers found, whereas non-dog owners spent more time sedentary and lost sleep.

Similar dynamics also helped insulate the veterinary industry during the Great Recession; revenue from the vet sector mostly just flattened rather than tanked, Nunes said.

The pandemic accelerated two other dynamics: Not only did people adopt more pets, they got stuck at home together. When humans are more attentive to their animal companions, they spend more money on them, veterinarians say.

Who spends the most time (and money) on pets?

That meant more visits — emergency rooms sometimes reported hours-long waits to see patients, and some vet offices said they stopped taking new clients for preventive care appointments — and more spending on nonmedical services.

In other words, said Byrd in San Antonio, we spoiled…

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