Dubin: I’ve been at this for almost 28 years, and I started with a company years ago after I left a law firm. I went to go work for a client who bought a very large residential portfolio with 300 doctors offices that were on the first floors and the lobbies of all sorts of residential buildings. The appointed task was to convert them from rentals to sales. We were very successful. In 2.5 years, we sold essentially the whole portfolio of medical spaces and I became an expert in that area of real estate. I’ve watched it change going from the individual doctors offices of 1,200 square feet to 1,500 square feet at the base of a residential building on the Upper East Side of Manhattan near all the hospitals to something that grew out to larger private practices that stayed the same way. When insurance companies started to change the way they reimburse in the early 90s to where the gloves were dropping and doctors started to become tenants and residents in everyone’s backyards. It used to be very lady-like and gentlemanly. The Lenox Hill doctors stayed in the grid by Lenox Hill hospital, and then the New York hospital doctors started going in everyone’s backyard because the reimbursement changed and the way hospitals were doing business changed. Probably ten or twelve years ago, it became very evident to me that the industry would be moving toward larger facilities and fewer deals. In my hayday, the best couple of years I had we were closing in excess of 30 to 40 deals a year. For a real estate broker, that’s remarkable, but they were all small. But it wasn’t so terrible that if a deal didn’t pan out or didn’t finish, you’d move on, as compared to deals that take months or in certain instances, years, for deals that are very large. It could be very very upsetting or almost devastating emotionally and financially. So we started to recognize that we were moving in a big direction and we were going to be on the cusp of this. We were going to be on the curve and understand what was happening in the industry more than any other broker would, because we were going to understand the business of healthcare, not just the real estate part of healthcare. Now that deals are fewer but larger and more visible, many of my competitor brokers have gotten into the healthcare business because it is a lucrative real estate business now. But I’m not sure they know the nuances the way we do. When I know that part of a facility is going to have an imaging center, those machines are very heavy and sensitive to vibration, they are very sensitive to magnetic fields. I know when I have that I am not putting the group near an elevator shaft in a building because every time the elevator moves, the magnetic field changes in the space. I’m not putting someone on top of a Metro North railroad track or Long Island Railroad track or right above track because each time the train moves back and forth, the magnetic field changes. Not only does it effect the quality of the medical service, it eliminates the ability to put that component in the location. So I need to be efficient with my time and efficient and respectful of my customer’s time. That’s appreciated because we make everyone’s time spent efficient.

GlobeSt.com: What opportunities do you see in healthcare both in New York and on a national level?

Dubin: The medical office building segment is very popular now, locally and nationally. We seem to see a lot of the buildings being offered as clustered near health centers. Many of the owners will go into partnership with local or regional hospitals or medical centers to build on their behalf to partner up with them. Hospitals are very good and medical centers are very good at providing medical services, but I’m so sure that they are equally competent in building. But as an investor, it is a very good fit because you know your building is going to have a cash flow so you are going to get the returns on your investment that make it make sense, so you would be comfortable taking the chance in those types of assets. In the New York area specifically, we don’t find the same size requirements that you find nationally. We are not looking at 200,000 and 300,000 square foot medical office buildings, because then you are in direct competition with the hospitals who you are trying to lure into your buildings as a tenant or for overflow of their doctors. In the New York area, we see smaller buildings probably 15,000 to 60,000 square feet, 70,000 square feet being the sweet spot for an investor. Again, it would be typically be attached either physically or in the vicinity of other medical institutions in New York. You would get overflow of their doctors that need space but need to be near the institution. The problem that you have is you can’t be that large where you start to step on other doctors. Everybody that is going to be investing or taking a large block of space wants to know that they are not going to have other competitors of theirs in the same building. So we have to put together a puzzle and make sure we get the right mix of the right doctors or groups.

GlobeSt.com: What neighborhoods are attractive for MOB acquisitions?

Dubin: Traditionally the clusters are where the hospitals are, the Upper East Side being the largest simply because you have more institutions there. You have Memorial Sloan Kettering, Columbia-Cornell, Lenox Hill Hospital and Mount Sinai. From 69^th Street to the low 100rds, you have a tremendous amount of healthcare being practiced. You also have a very big cluster down where Beth Isreal is on the teens on the East Side. What’s happening in the industry, because you have so many private practices, it is almost a hub-and-spoke concept. The hospital is the hub, and they need to have a lot of spokes out in the community to be able to draw patients back in.

GlobeSt.com: Has retail/office leasing been active for medical and healthcare tenants?

Dubin: Very, especially for urgent care groups. With what’s going on in insurance and reimbursements there are many people that can’t go to a doctor or don’t want to go to doctor because it’s inconvenient but they wake up with a sore throat or have a sports injury, so instead of sitting for three hours in an emergency room will go to an urgent care center and be seen and then directed. We are seeing many, many more of those in the area. The problem with that is that you are paying retail rents. These doctors are used to paying office rents, so they are taking smaller spaces, or they are trying to take a space that has some street visibility.

GlobeSt.com: What are capital sources like for MOB?

Dubin: Because the medical office building market for real estate is really one of the bright spots in the economy right now, it’s the truth that people get sick, people have injuries and people have illness whether times are economically good or bad. This industry doesn’t fade away in bad times and come back roaring strong in good times. It’s there, and it’s consistent. It’s been one of the bright spots in the real estate industry and it’s actually one of the brighter spots in the lending environment because the default rates are lower. We are seeing that the underwriting is not all that different from any other kind of commercial investment property, but there are lenders out there that have really developed an understanding of how this market works, so funding is a bit more readily available than others.

GlobeSt.com: How does President Obama's healthcare policy impact the healthcare real estate sector?

Dubin: At this point in time, the ship has sailed. The industry is changing because the government is requiring it to change, the insurance companies are requiring it to change and the population is requiring it to change. People will get universal healthcare, whether it will be under Obama’s component, the next administration – it’s already been put into place. It’s happening, and the wheels are turning. We have seen this. The individual doctor, the way you and I probably went to growing up, will not exist in 10 years. You may see that same doctor, but that same doctor may be part of a much larger private practice, where there could be 20, 40 or 50 doctors.