ASC Experts: An Interview with Elliot Dennis on ASC Real Estate and Development
By: Campbell Helm
As part of our ASC Experts series, I interviewed Elliot Dennis, founder of Dennis Healthcare Real Estate. Elliot has represented healthcare tenants across New York City and has worked on projects ranging from GI-focused Article 28 facilities to institutional hospital systems, multi-specialty offices, and everything in between. In this interview, he shares his insights on the ASC real estate market, the impact of interest rates and construction costs, and where he sees opportunities ahead.
Q: Can you give us some background on your experience working in the ASC industry and in healthcare real estate more broadly?
Dennis: My firm exclusively advises healthcare tenants and purchasers on their commercial real estate, and we often work with physician groups and operators from the onset of the idea for an ASC through opening and operating the ASC. The real estate piece is our expertise, but we strive to be a resource for all facets of an ASC by leveraging our experience and network for our clients. I’ve worked on projects across Manhattan, Brooklyn, and Queens and continue to actively recommend ASC groups; we are currently working on 3 different projects.
Q: How would you describe the current state of the ASC real estate market?
Dennis: There’s more opportunity in New York City today than ever before for ASC tenants because owners have broadened their perspective on healthcare tenancy as a whole since COVID due to the challenged office market that has followed. That sentiment remains even as we are seeing positive momentum in the office market now. Having said that, ASCs have extremely specialized requirements from an infrastructure standpoint and deal structure standpoint, so appropriate sites are always going to be limited.
Q: Are you seeing more health systems building their own ASCs, or is private equity driving most of the activity?
Dennis: It is really both. Health systems are frequently converting existing space they lease or own already into ambulatory facilities as of late; I read about one almost every week. Private equity is driving prospective new centers.
Q: What types of locations are most in demand right now?
Dennis: We are seeing the most activity in the boroughs and Long Island; there is both a lower barrier to entry on cost and a larger pool of feasible sites. Asset-wise, new construction is always attractive because it has new infrastructure and passes many of the early feasibility concerns sight unseen.
Q: Have rising interest rates and construction costs slowed down ASC development?
Dennis: Yes, it has made new development more difficult for certain. The biggest hurdle with most ASC projects is the cost of construction. If money is more expensive, materials are more expensive, and labor is more expensive, it is simply more difficult to get a project off the ground.
Q: What are the most common mistakes healthcare operators make when selecting real estate for an ASC?
Dennis: The most common mistake is being reactive, not proactive, about site selection. An ASC tenant needs to dictate the site selection process. The best way to do so is to be armed with the right network (vendors, consultants, brokers, architects, engineers, etc.) who ask the right questions and can evaluate every site efficiently.
Q: Are landlords offering competitive build-out allowances for healthcare tenants?
Dennis: Overall, yes. ASCs are stable, long-term tenants who invest heavily in the building they are in. Landlords who understand, or grow to understand, the tenancy often provide above-market concessions in the way of TIA (Tenant Improvement Allowance, cash for your buildout) and free rent. Every negotiation is different, and there is no one-size-fits-all, but if you are positioned correctly as an ASC tenant, you should be provided significant concessions.
Q: Looking ahead 3–5 years, where do you see the biggest opportunities and risks in the ASC real estate market?
Dennis: On the opportunity side, regulatory shifts are allowing more procedures to be done in outpatient settings, which is going to expand the demand in the market. Anecdotally, I have had more conversations with young physicians about starting ASCs this past year than in any year prior. I do believe there is a fundamental shift in the entrepreneurial approach of younger physicians, which will lead to more ASCs as well. On the risk side, the cost of construction remains the biggest hurdle and risk.
Dennis’ perspective highlights the delicate balance of ASC development in New York: increased landlord openness and patient demand on one side, and high costs and complex requirements on the other. For operators, success depends on preparation, strong partnerships, and a realistic understanding of the challenges ahead.