real estate Doctors, dentists, therapists – you don’t associate them with real estate. With Tribeca Pediatric on Vernon Boulevard and the newly-opened OptimEyes Vision of LIC on 50th Avenue, Hunters Point is starting to look like a more complete neighborhood. But besides those two recent additions, and the more-established Queens West Health, LIC is still extremely thin on medical offerings, and way behind the more established neighborhoods like Astoria and Sunnyside. Besides the fact that a doctor needs adequate volume of residential or office traffic to open a new viable medical office, there is the issue of cost setting it up. Unlike an accounting or legal office, the cost to set up a medical practice can be very high, especially where procedures require specialized equipment, ADA access and availability of certain utilities. When you add the fact that landlords are never too eager to offer help with construction, and the doctor’s need to secure long-term leases, plus their relatively high foot traffic, it starts to make sense that medical real estate has enough wrinkles and quirks to lend itself as a sub-specialty for a small group of property owners and commercial brokers. Here is a snapshot guide to M.D. RE, divided into tenant and landlord perspectives: by david dynak M.D. RE LANDLOLRD SIDE: Property owner typically makes a conscious decision to designate a building as medical, medical-friendly, or just office/ commercial. Pros of medical tenants: Relatively stable and hard to move. When you rent to a medical professional with experience, you know you will get your rent paid, and their business model will stay similar for years. No surprises are good for stability and the lease expires, you can often ask for premium rent. Cost of building out medical space can easily be $150 per square foot, and finding another building with a combination of physical attributes, access and ownership accepting of high daily in-and-out patient traffic is not easy. Therefore, overpaying on rent is common. A landlord can offer a space containing previous doctor’s improvements to a new tenant at a nice premium. Cons: The demand to provide adequate utilities, elevators, ADAcompliant egress, and long-term leases. You either have to provide a medical tenant with significant tenant improvement allowance in form of cash or free-rent, or both, so they can build their space. In order to justify such investment, to give it enough time to recoup the money put into the location, both the tenant and the landlord are likely to demand at least a 10-year lease term an often as much as 20 years. That makes the property “stuck” with tenants for long periods, making it less liquid for sale and taking away flexibility to change use, increase rents, knock down or renovate the building. TENANT (DOCTOR) SIDE: Medical professionals know where they want to be geographically, and that is easily accessible to their patients. So, if they have been in business for a long time, they almost always have to stay in the same area, limiting their options. They also want to be easily found but can’t always afford a ground-floor retail location next to a subway, so they prefer to flock together. A medical building or block with other doctors makes it easier for patients to find another specialist and even plan their visits back-to-back. It sure is convenient when your primary physician can tell you to go see an allergist or get your blood work done right after you see them on a floor below or across the street. There is a reason that a small group of real estate brokers chooses to specialize in representing medical tenants. Those doctors aren’t always the best space planners or business people. They have a limited number of properties to choose from. They know how many exam and operating rooms they want, but they don’t have the time to preview dozens of spaces because they have patients to see every day. They may need specialized equipment, but they just can’t picture how to fit them in the 1,200 squarefoot office. Dealing with small size spaces, limited inventory and often picky-but-clueless real estate clients has its rewards. Longer-term leases and above-market rents translate to pretty good commissions. It’s a small, quirky part of real estate business but for those who are willing to deal with it, there’s always action – independent of the economy or real estate market. David Dynak is a real estate broker at First Pioneer Properties and an LIC resident. He’s lived in Western Queens since 1993. THE ART OF ELDER LAW For more than 30 years the elder law firm of Ronald Fatoullah & Associates has been providing New Yorkers with legal solutions that protect, relieve and endure for generations. Our dedicated attorneys are skilled in the art of giving legal advice and are accomplished in elder law, Medicaid eligibility, estate planning, trusts, estate mediation, wills, asset protection, guardianships, probate and most issues associated with the challenges of aging. Our distinguished reputation is based on a commitment to the highest ethical and professional standards and our core values of honesty, integrity, and excellence. “We won’t settle for anything less”. 1-877- ELDER LAW 1-877-ESTATES Queens • Long Island • Manhattan • Brooklyn ATTORNEY ADVERTISING
LIC082014
To see the actual publication please follow the link above