An interview with Alfonzo Leon, Chief Investment Officer for Global Medical REIT

Hall Render

An interview with Alfonzo Leon, Chief Investment Officer for Global Medical REIT
In this interview, Andrew Dick interviews Alfonzo Leo, Chief Investment Officer for Global Medical REIT. Andrew sits down with Alfonzo to discuss health care REITs.
















Podcast Participants





















Andrew DickAttorney with Hall Render
















Alfonzo LeonChief Investment Officer, Global Medical REIT























Episode Transcript

Andrew Dick: Hello, and welcome to the Health Care Real Estate Advisor Podcast. I’m Andrew Dick, an attorney with Hall Render, the largest healthcare focused law firm in the country. Today, we will be speaking with Alfonzo Leon, the chief investment officer of Global Medical REIT, a publicly traded equity REIT that trades on the New York stock exchange under the ticker symbol GMRE. Alfonzo has been a real estate and investment banking professional for a number of years. Prior to joining Global Medical REIT, he worked for an investment banking firm, helping hospitals and healthcare providers on strategic real estate transactions. Alfonzo along with his colleagues have grown Global Medical REIT to a respectable healthcare REIT. And today we are going to talk about his career and his current role at Global Medical REIT. We’re also going to talk about the Global Medical REIT portfolio and healthcare real estate industry in general. Alfonzo. Thanks for joining me.Alfonzo Leon: Thanks for having me.Andrew Dick: Alfonzo, before we talk about your role at Global Medical REIT, let’s talk about your background. Give us a little bit of information about where you’re from, where you went to college and what you aspired to be.Alfonzo Leon: Sure. Great. So I was born in South America. I came to the US for college, went to the University of Virginia, studied to be an architect initially. Right after I graduated from UVA, I lived in Martha’s Vineyard for a year. While I was on the Island, I enrolled in the center for real estate program at MIT and went to that program for a year. Coming out of that program, I started a job with LaSalle Investment Management, out of their Baltimore office. That was a great opportunity for someone that’s in essence, starting their career. I had a chance to work with a lot of acquisition officers across all asset types, office industrial retail, medical office and hotels. I actually sat next to the acquisition portfolio manager for LaSalle, that was starting a medical office fund.Alfonzo Leon: So I did a good amount of work with the director of that MOB fund over the years. So I did that for about five years. In 2005, I decided to look for other opportunities. I joined a boutique healthcare investment banking firm called Cain Brothers, out of San Francisco. And it was a pretty, a unique opportunity. At the time, this is 2005, medical office was still considered a very niche investment class and there weren’t really that many people that were in the space. I joined a group within Cain Brothers that was dedicated to MOB monetizations on behalf of health systems. That was the core business model. So over the years, Cain had built many relationships with small health systems across the country, health systems with two, three, four hospitals within their network, which were too small for the big wall street banks.Alfonzo Leon: The founders of Cain, two brothers actually formed the company in the mid ’80s with a goal of servicing these smaller health systems. So when I joined in 2005, Cain Brothers had completed about a handful of monetizations in the past couple of years. And it was that they were in many ways pioneers in the space. The first monetizations happened in 2001, 2002, when Ascension started, engaged Ernst & Young to evaluate their real estate holdings and they were looking for ways to raise cash, to help their credit ratings. So that in essence started the industry that I’ve been in since in essence 2000 when I joined LaSalle, and Cain Brothers was one of the pioneers. So when I joined them, it was a group of about six bankers, never really grew beyond that number.Alfonzo Leon: But over nine years from 2005, in 2014, I worked on over $2 billion worth of transactions in the healthcare space. So I spent a lot of time over those years working with health systems, working with physician groups and also interacting with a lot of the buyers in the space. So all the public REITs, the private REITs and the private equity companies that have joined over the years. So it gave me a very unique perspective, in a sense, I had a chance to observe and learn from other investors in the space over nine years. I also had a chance to interact with health systems at the board level, where they were actually making decisions on healthcare. Also I had a chance to work directly with physicians and then most importantly, Cain Brothers, since they had a focus on healthcare for nine years, I had the opportunity to hear from other colleagues who were in the home health business, senior housing business, who were in the managed care business.Alfonzo Leon: And the medical device companies, IT, I mean a pretty wide spectrum. And Cain Brothers also had a pretty active tax exempt bond business. The guy who ran the real estate group within Cain Brothers, he also ran Cain Brothers, their M&A practice for hospitals. So I also had some exposure to that process when a hospital is acquired by another hospital. I had a chance to observe kind of their thinking and what goes into that process. So very unique perspective that I had prior to joining Global Medical REIT.Andrew Dick: So Alfonzo, it sounds like when we spoke before you were happy working at Cain Brothers, you had a very good experience. You liked the variety of work and generally weren’t looking for new opportunities. So how did you end up making the move, or what prompted you to make the move to Global Medical REIT?Alfonzo Leon: Sure. And you’re correct. I mean, I had no plans on either looking for opportunities outside Cain Brothers or leaving San Francisco, which it’s not a bad place to live. So really it was a coincidental, I got put in touch with somebody that was, a person who was the former CEO of Global Medical REIT. He was starting the company, looking for the first acquisition. And I struck up a conversation with him and realized that there was an opportunity to join what in essence was a startup REIT. And while it came over nine years, I saw a lot of funds start with zero assets, and within a two, three year span, grow their portfolios significantly. At one point I sat and counted all the funds that I had seen grow to billions over the years and I counted over like 13 funds.Alfonzo Leon: I’m not sure how often you have that phenomenon in other sectors but it did catch my eye. I saw a lot of groups grow big funds. So when I met Dave, the former CEO, it was intriguing. And it involved moving to Bethesda, Maryland which I also thought was coincidental because I had lived in Bethesda, Maryland during high school for a couple of years and I knew the area very well. Things moved pretty quickly after that first meeting. I found myself moving to Bethesda, Maryland to join Global Medical REIT in August of 2014.Andrew Dick: And Alfonzo, did you join as the CIO or what was your initial role within the company?Alfonzo Leon: Sure. So the startup of the company was very unusual. So Global Medical REIT was actually one company of many that were run out of the Bethesda office. So the company that I joined was actually called Inter-American Management, which in short and in essence was the Bethesda, Maryland office for a family office run out of Singapore. One of the things that this family office out of Singapore wanted to do was become a REIT incubator and Global Medical REIT was actually the second REIT that they had started. The first one was a single family home REIT. So I was joining their second REIT. So when I joined it, there was about a dozen people working out of the office, but really the only two people that were working on Global Medical REIT was Dave and myself, which was interesting.Alfonzo Leon: So that was from August of 14 to I’d say the end of December 15, it was just the two of us. I ended up right around, at some point in 2015, I hired in essence our first support person that dedicated to Global Medical REIT. This person helped me tremendously and he’s still with us, helped me tremendously at that beginning phase. So with Dave, we bought our first two assets and that was in June of 14, just prior to my joining, in September of 14, that was the first one I acquired. We spent a lot of time trying to raise capital within the US, we did a capital raise in Singapore as well. And by July of 15 we got capital from through the Singapore family office, this group gave us 30 million to put together a portfolio that we could take, that put together a $100 million portfolio that we could use to have an IPO to start the company.Alfonzo Leon: So with the money we got in July of 2015, we quickly put it to work. And by March of 16, we built a $100 million portfolio and that between March of 16 and June of 16, we ran pretty hard towards an IPO. We put together a team. We got the legal team as well. We did our road show in June and we completed it in the month of June. So things moved pretty quickly, after we got that first a $30 million SLUG and we’re able to put together a portfolio quickly as well.Andrew Dick: So Alfonzo, do you remember what the first few assets you acquired were, what type of healthcare assets they were?Alfonzo Leon: Sure. So the first one we acquired was a LTACH in Omaha, Nebraska, 21.7 million. The second asset we bought was a surgery center in Asheville, North Carolina, that was 2.4 million. The third asset we bought was ophthalmology clinic with a surgery center in Pittsburgh. That was about 11 million. The fourth asset we bought was actually a portfolio of six MOBs in Germantown, Tennessee. And it was a sale lease back with a gastro group, that the largest one in the area, that was 20 million. In February of 2016, we completed the acquisition of a surgical hospital in Dallas. That was 18 million. And then in March and concurrent with getting financing, CMBS financing on the entire portfolio, which was in that sense kind of a triple back flip because we were rolling in the portfolio we bought in December from the gastro group and the surgical hospital in Dallas, plus closing on a surgery center in Detroit 4.5 million and closing on a medical office building in Melbourne, Florida for 14.5 million. So that was a very tricky thing to do and one that I swore I’d never tried to do again.Andrew Dick: I bet it was exciting though. I mean, starting as you described it, a REIT startup that had to be a lot of fun.Alfonzo Leon: It was fun in the sense that it felt like you were going down a roller coaster with no breaks.Andrew Dick: Well, tell us about the portfolio today, when you and I spoke before you’ve got a wide range of healthcare assets. In my mind, Global Medical REIT is a diversified healthcare REIT. You’re not a pure play. You’re not focused just on MOBs or hospitals. Do I have that right and talk about kind of the breakdown of the portfolio.Alfonzo Leon: Sure. So from the very beginning our goal was to build a portfolio of purpose built healthcare facilities. We used a strong healthcare systems and physician groups with leading market share in secondary and tertiary markets with the goal of producing reliable, rental revenue with rent bumps and a diversified footprint and with the goal of having this portfolio be triple net or absolute triple net. So just recently we announced we reached a billion dollars in assets, with about 80 million of annual base rent or triple net rent or NOI if you want to call it that.Alfonzo Leon: So over 115 buildings with over 100 tenants with an average rental increase of 2% over three square feet of space and with an occupancy of 99.7% and current NOI divided by purchase price, a cap rate of 8%. And with a weighted average lease term across the portfolio of about 8.4 years. So that’s our portfolio currently. In terms of the asset types we buy, I mean, primarily it’s medical office buildings, the bulk of it is medical office buildings but we also buy inpatient buildings. So we’ve got the balance of the portfolio is a mix of inpatient with other asset types.Andrew Dick: Got it. So talk about your role. You’re now the chief investment officer. What does that entail? What are you doing on a day to day basis? And then take us into what is the ideal opportunity you look for when analyzing assets that come across your desk?Alfonzo Leon: Sure. So one of the things that I enjoy the most about my current role is that no day is the same. I mean, every day has been very, very different. And even when I think about what I’ve worked on a quarter by quarter basis, it’s evolved quite a bit. Largely due to the fact that the company has been growing as much as it has and at different sizes, there were different challenges and different things that I had to focus my energies to address or to manage. I mean, we went from two people working for Global Medical REIT to today we’ve got 20 people. So it’s been quite a ride and quite a process and that every quarter there was a different set of challenges that we had to overcome. In the early years, it was capital raising and I spent a mind numbing amount of hours working on PowerPoints and making pitches to a wide range of investors.Alfonzo Leon: And then there was the phase that I remember where we were trying to close on that $100 million portfolio. And then finishing that we moved into conducting the IPO. Then once we got that done and we raised $150 million, we switched into ramping up our acquisition strategy. So that was the second half of 2016. Then in 2017, it was a lot of things happened one of which was, we started, our credit facility with 75 million capacity, with an accordion feature as well. Continued executing our acquisition strategy, 2017 was also a year where we had a turnover of our CEO. That’s when Jeff, our current CEO stepped into the role. We also changed our CFO and we also changed our general counsel. So it was quite a bit for a new REIT, new company. And 2017 was a bit of a blur, I mean, there was a lot happening that year, but we ended up on a high note.Alfonzo Leon: We raised money in June of 17, about 35 million. And in December, we raised additional funds, 75 million of preferred equity. Just in time for 2018, which was when rates started increasing, the FED started jacking up rates, which really changed the REIT landscape for the year. Fortunately we came into the year with a lot of capital and in 2018, we supplemented that capital, with acquiring buildings, with operating partnership units. So we did about $36 million of deals in that fashion. And 2018 was really sort of, for us, it was a year of us showing to our investors that our business model is working and that we can continue growing this company. 2019 was a great year all around. We hit a lot of milestones. The biggest of which was in, right around Thanksgiving, we got to add it to the Morgan Stanley index, which really increased our volume and our share prices started going from an average of nine, 10 up to 11, 12 and 13.Alfonzo Leon: So that was a very, very big milestone. In 2019, we did a lot of acquisitions, very, very busy year. And in many ways we were kind of hitting our stride and came into 2020 with a lot of wind in our sails, with a very big pipeline. And when we did our earnings call in February… Sorry, our year end quarterly call with investors at the beginning of March, sorry. After our call, our stock actually went up to almost 16. So it was in large part due to the fact that 2019 we really hit our stride, hit a lot of milestones, had very good pipeline, very good deals. A lot of things came together for us in 2019. So when I think quarter by quarter, I mean, what I’ve had to focus on has changed dramatically. So to reiterate like no week is the same, every day is pretty different. In terms of my responsibility, what I think my primary role within the company is to make sure that I generate as many opportunities to invest capital as I can. In many ways I want to have more opportunities to invest than capital at all times.Alfonzo Leon: So my team of three acquisition people, we spend a lot of time trying to get ahead of our capital raising efforts so that we can, not just be more selective, but we can… whenever there’s an opportunity to raise capital, we’re never short on pipeline, given the fact that capital raises, to have a successful capital raise, you have to have a pipeline. So what I view my principal role within this company is to make sure that we’re generating the maximum amount of opportunities for the company to grow.Andrew Dick: And Alfonzo. So when you’re looking at opportunities, what is your sweet spot? What is the return you’re looking for, asset types? Give us just a quick overview of your approach.Alfonzo Leon: Sure. So our strategy really hasn’t changed since IPO. We focus on buying high quality real estate and desirable secondary tertiary markets, least profitable healthcare providers that are leaders in their respective fields. We focus primarily on acquiring medical office and outpatient treatment facilities in the five to 15 million range and opportunistically acquire inpatient facilities, typically in a 20 to 40 million range. To go back to our composition of our portfolio, I have a breakdown here for you. So 57% of our portfolio is MOB of which 20% of that has surgery centers. 24% of our portfolio is inpatient rehab hospitals. 8.5% of our portfolio is surgical hospitals.Alfonzo Leon: We have 3% of our portfolio is LTACH. 3% of our portfolio is acute care hospital. 3% of our portfolio is administrative space. And 1.2% of our portfolio is freestanding ERs. Geographically across the country, we have 20% of our portfolio in Texas, 10% of our portfolio in Ohio, 8% in Pennsylvania, 8% in Arizona, 7% in Oklahoma, 7% in Florida, and then the numbers spread out across many other States after that.Andrew Dick: Very interesting and it sounds like a pretty diverse portfolio. Let’s switch gears. When we spoke before you talked about the fact that Global Medical REIT was at one point managed externally. And recently you and your executive team made the decision to internalize the management function. Give us just a brief overview of how that process worked and what the strategy that’s involved there.Alfonzo Leon: Sure. So when I joined the company it was… I joined Inter-American Management. So most of the REITs in the universe are internally managed REITs. There are a few and I don’t know if it’s less than five or right around 5% or more, of the REITs in the universe that are externally managed. And really what that means is the employees who run the company are not employed by the REIT but by the manager. So the agreement we had with the manager was the manager provided all the human resources in exchange for a 1.5% fee. Historically, there’s institutional investors do not like externally managed REITs very much. At the heart of that is concerns around governance. There’s also been some bad actors in the REIT space that have not always had the best interest of shareholders in mind when they were running their business.Alfonzo Leon: So we at the very beginning we set it up to be externally managed really because in outside of the US and in Singapore and Japan, for example, the REITs over there are externally managed. So it was set up from the very beginning to be externally managed for that reason, given the source of funds, the initial source of funds. When we were doing our IPO process, it became pretty clear to us that having the external manager model was going to make it harder for us to access institutional investors. So what we did at the beginning was set a milestone when the board of independence would start the internalization process. So we looked at a lot of case studies that our bankers and our lawyers provided, and we settled on a $500 million market cap threshold upon which when we get to that point, we would ask the independent board would start the process of internalizing the manager.Alfonzo Leon: So in December of 2019, we raised about 80, $85 million of equity at $13 a share. That got us over the $500 million market cap threshold. So by the end of the year, the board started engaging their consultants, the manager engaged their consultants and attorneys, and the process kicked off in earnest [inaudible 00:26:44] in Q1 of this year. So pretty much for the first half of the year the board, a committee of the board that of GMRE negotiated with the manager Inter-American Management. I mean, really what they were negotiating is the breakup fee. Ours at the very beginning was set very formulaically. It was just three times the 12 month average fee. That number was competed to be about 18.2 million. We had a press release on that at the beginning of July when the process was concluded. And these, the best way to think of it is, this is in essence an M&A transaction.Alfonzo Leon: If you read through the filings, Global Medical REIT in essence acquired Inter-American Management and Inter-American Management became a subsidiary of Global Medical REIT and all the employees, including myself moved, are now employees of Global Medical REIT. So at high level, it seems like a straightforward process, but nonetheless it is an M&A transaction, and there is a lot of back and forth that happens in normal course of business. In our circumstance, the fact that we had COVID and a lot of market volatility also extended the process longer than it probably should have run by maybe a month or two. But ultimately we got it done and announced that at the beginning of this month.Andrew Dick: Very exciting. I know that that’s a big milestone. Talk about the leadership’s team, the vision that you and your colleagues have over the next three to five years for the organization. Are there any financial milestones or what are you looking to accomplish over that period of time?Alfonzo Leon: Sure. So simplistically, I mean, we plan to continue growing and building a diversified portfolio. Every company needs to play to their strength. We’ve built a real estate investment platform to find execute deals in our niche. So our plan is to continue leveraging our experience and knowledge of healthcare real estate to identify deals with good risk adjusted returns at cap rates that allow us to invest our capital creatively. Every stage of growth comes with unique challenges. I consider our internalization that we announced at the beginning of this month as a book and to our startup phase. So the way I see it, we are now a $600 million market cap company in a growth phase, in a market sector with very good fundamentals. So in short, I mean, our strategy is to continue executing our business plan that we’ve had since IPO and continue growing this and continue matching capital raised with opportunities within healthcare real estate.Andrew Dick: So Alfonzo as you’re executing on this strategy, how has COVID impacted your operations, your facilities, and some of the tenants you’re working with routinely? Give us a snapshot of how the last four or five months of have went for Global Medical REIT in terms of rent collections. And what are you seeing and hearing as you’re working with tenants?Alfonzo Leon: Sure. So the last several months has been one that we’ve all lived through and it’s been very intense. When I think of the last several months and I compare it with the financial crisis of 2008, in a sense that you had housing. like in 2008, if you think about it, you had a housing bubble, combined with a credit crisis, and both are subject matters that are very relevant to what I do. This time around you had a healthcare crisis and a capital market crisis and the impact on real estate has also across many sectors has also been very dramatic. So in many ways the last several months I’ve been reading obsessively and trying to learn as much as I can about the impact COVID is having across many aspects of what I do for my job and what I do for my career.Alfonzo Leon: And it’s definitely, I have to believe kind of a once in a lifetime kind of event. It’s been very dramatic. Having said that, we’ve reported our numbers in terms of collections and in terms of occupancy. And in the next week, we’re also going to report our Q2 earnings. And if you compare what we reported thus far with our peers, I mean, our portfolio has performed in line with other medical office portfolios. The month of April was very intense. There was a lot of uncertainty about how this was going to evolve. I mean, if you didn’t read the news for half a day, you were behind the curve in terms of staying current with the news. There was just a lot of new things that we all had to get accustomed to quickly. In discussions with our tenants, we spent a lot of time talking to them.Alfonzo Leon: I spent a lot of time talking with other companies in our space, a lot of people that I know in the space. I walked away with a few kind of I guess a picture things. I mean for starters, the one thing that I think is clear to everybody is that healthcare is essential. It is an industry that needs to be defended. It’s an industry that is critically important to the country and not just the country, but to the economy. I mean, without a robust functioning healthcare system, you compromise many other aspects of the economy in the country. The other thing that I took away from the last several months, healthcare operators are very resourceful. You’re looking at a group of people that are very smart, very hardworking, that are very mission driven, that are not afraid of to work around the clock, have access to a lot of specialists and consultants that can help them.Alfonzo Leon: Also as a group, they are very good at managing bureaucracy and paperwork when you think of healthcare reimbursements and if you think about in your own personal life having to deal with insurance companies, it’s tedious, but the healthcare operators are incredibly good at running and managing all that bureaucracy. So I would say in terms of characterizing kind of what I’ve seen, I mean, it’s just a resilient group of professionals in a healthcare space that have adapted quickly. They got a lot of support and help from the federal level and from CMS and from various other sources. So where we are today in terms of where we were even a month ago, I mean, it seems like healthcare providers have found ways to make it work. I mean, by no means, are we out of the woods on this one?Alfonzo Leon: I mean, I think everyone’s acknowledged and are braced for the fact that this is going to be a long, long process measured. I think folks are thinking, we’re going to be living with this well until the end of the year and very likely through most of 2021. But it’s been remarkable to see just how hard the healthcare professionals have been working, not just in taking care of people, but also in running their business. So my hat goes off to them. I mean, it’s been remarkable to watch.Andrew Dick: Agreed. I think the industry has fared pretty well given all of the challenges and in most parts of the country, electric [inaudible 00:35:49] procedures are continuing. And some of the providers that had to shut down are open back up, which is good to hear. In terms of opportunities, where do you see opportunities for healthcare REITs or for Global Medical REIT in particular, as we work through the crisis?Alfonzo Leon: Sure. So within healthcare real estate specifically, among the many things that I’ve been thinking of lately. I mean, it’s pretty well known that there’s been a shift from inpatient to outpatient. I mean, that hasn’t changed if anything, it [inaudible 00:36:28] probably, you’re looking at a scenario where things have accelerated up a little bit. Telemedicine also something that I’ve heard people talk about for a very, very long time. We had an amazing opportunity to see that implemented in an aggressive way. And on the other side of that, I mean, it’s not totally clear how much of an impact that’s going to have on the space. I mean, I had folks in the telemedicine space say it this way, it’s not a replacement to healthcare real estate, but a compliment.Alfonzo Leon: And as I pulled together, everything I’ve heard on that front, I mean, it definitely seems that rings true. I think actually it’s made some things more efficient. In terms of how healthcare gets delivered or how it evolves over the coming years. I mean, I think there is a lot to be said for convenience. And when you think of large medical office buildings with multiple stories, five, 10 story buildings with elevators versus a single story facility that is a lot more convenient than more single use focus, there’s pros and cons to both, most of what we have is that the latter. It’s a single story or two story facilities that are more… the focus of care within those facilities is more single purpose than multipurpose like you would find on an on campus building.Alfonzo Leon: I think, there’s going to be, continue to be opportunities and a space as it has in the past. My experience in healthcare for the past 20 years is things don’t change radically year to year. I mean, it’s more of a gradual evolution. I can’t remember any time in the past where I think I’ve seen things evolve rapidly. I mean, it’s more of a gradual change. When I think of healthcare systems and how they think about delivery of care and how they think about their real estate, they also… it’s more of a gradual move and it’s more incremental instead of sort of a change. But all that, to say that I don’t see the healthcare real estate landscape changing dramatically over the next few years. I think a lot of the trends that have been in place for the past couple of decades are just going to continue, maybe accelerate slightly. But what it means for investors, I mean, I think there’s still plenty of opportunities in the space.Alfonzo Leon: One thing that’s really worked in favor of investors in healthcare is the amount of supply that’s coming to market. And I compare that with where it was 10 years ago, or 20 years ago. 20 years ago, the volumes were fractions of what they are today. And when I thought about the question of why the supply has gone up so much, no perfect answer. I think it has to do with the fact that investors have come in and provided liquidity and you’ve seen cap rates go down and it made it more attractive to sell, and it’s been sort of a circular dynamic that’s evolved over the years. And every year I do get the sense that there’s more inventory, higher quality inventory and more investors.Alfonzo Leon: So it kind of feeds itself, but when I think of the volume today versus even five years ago, I mean, it’s very robust. One of the things that’s been surprising over the past four months is April, May was slower than average, but by June and July the market pretty much snapped back the pre COVID levels. I mean, it’s been very active. There’s a lot of deal flow. The quality of the deals coming to market are pretty good. As I think of the next a few years and into the future, I mean, I don’t see that dynamic changing dramatically.Andrew Dick: That’s good to hear, especially for those of us that work in the industry. Alfonzo talk about advice that you would give to someone who’s getting into the healthcare real estate industry. I asked most of our guests, what would you tell someone who’s just getting into the business, what should they read or who should they talk to, or what advice would you give them?Alfonzo Leon: Sure. So one of the things that attracted me to the industry is the fact that you’ve got real estate, which I liked. And then you’ve got this overlay of healthcare industry on top of that, that makes it a lot more complicated than other asset classes. Prior to me joining into space and dedicating myself to healthcare in 2005, I had done a lot of apartment investments with LaSalle. And when I compare just those two on its own, like apartments versus healthcare, it doesn’t take that long to get your head wrapped around multifamily investments. Whereas with healthcare, I felt like even after two years of dedicating myself to the space and trying as hard as I could, reading everything I could about the space, I still felt like I was a beginner.Alfonzo Leon: It takes a long time to really get a sense for the industry and the dynamics and the investors and the systems. I mean, there’s just a very, very large knowledge base, which is attractive to me. So I would start by saying that this is an industry with a very high knowledge barrier to entry, which is taxing at the beginning. And a lot of folks that I see started in the space, they are… it works against them, as they’re trying to figure out the industry and trying to figure out who’s who and why things are good, or why things are bad. But once you get on the other side of it, once you’ve got enough knowledge that you sound credible and sound like you know what you’re talking about, it helps because there is a barrier to entry. I would also say that the sector is not very large when you look at the BOMA, MOB conference and you’ve got a 1000 attendees.Alfonzo Leon: I mean, you’ve got the lion’s share of people that are in the space and have committed their careers to the space. And within that group, I mean on the investment side, I mean the way I think of it, there’s about 100 people on the investment side. So it’s not a very large industry. And when I compare the MOB, healthcare real estate investment crowd with like the apartment investment crowd, or like the senior housing investment crowd that I’ve also had a chance to experience. I mean the one thing, the way I would characterize it is, it’s on average, you’ve got a very institutional mindset. You’ve got a lot of the people in the space are very smart. They’re very good people, very friendly. So I would say, this is an industry that’s, I would characterize as one with a lot of very smart people, hardworking people, very ethical people and good people to work with.Alfonzo Leon: So one that I enjoy very much, and I guess last thing I would say for anyone that wants to join the space is I would focus especially at the very early start of your career into space is trying to find a good mentor. In my career, I feel very fortunate that I’ve had very good mentors, and so I can’t stress that enough. I think it makes a world of a difference. And I would say, I would pick a better mentor in spite of, the type of job you might have because I think longterm you get more dividends.Andrew Dick: Good advice. Alfonzo, I’ve enjoyed our conversation and I’m getting to know you. Where can our audience learn more about you and Global Medical REIT?Alfonzo Leon: I would encourage folks to check out our website. We’ve got a pretty good investor decks that are also posted on that website. I think, I would just highlight the fact that we’re a new REIT. We did our IPO in June of 16. We’ve grown pretty fast but we love what we do. Our group in Bethesda is very united. We’ve got a very strong esprit de corps and very much a lot of the folks that are with us have been with us since the beginning. So it’s been an exciting journey, one that has been very rewarding for me career wise and one that I hope to continue watching grow over the years.Andrew Dick: Terrific. Thanks to our audience for listening to the podcast on your Apple or Android device. Please subscribe to the podcast and leave feedback for us. We also publish a newsletter called, The Healthcare Real Estate Advisor. To be added to the list please either email me at A-D-I-C-K, [email protected]. 























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