79: Envisioning the Future Webinar Part 1

Foreign.

This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program you'll learn about the world of commercial real estate and find out why it's one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to Real Estate Investing Live from New York for episode number 79. This is your host, James Nelson. I'm principal and head of Tri State Investment Sales at Avis and Young. And thank you, thank you, thank you for joining again week after week telling your friends, sharing the news. I've got to say what was so wonderful was I was at an event last week, a small gathering, I should say. Definitely not an event. We're still doing things safely and in small groups, but to actually see some people from the real estate industry again and many of them saying, hey James, thank you so much. I've been following your show and learning so much and certainly the bulk of last year where so many of us have been remote, it's been great that this has been a way to stay connected. And on that note, if you have not checked out my new weekly Clubhouse show or if you haven't checked out the app, let's start there. Unfortunately it's just for Apple users and I am hoping they figure out a way to get this on Android. But for those of you who do not know, Clubhouse is a forum where we can have discussions. We've got topics every week. I do the Show Thursdays at 12 noon Eastern Time. Chris Marano, who is an angel investor and has also done a lot of exciting things in real estate, as well as my partner in Republic, Janine Yorio. And if you haven't heard my interview with her on the show, definitely go back and listen to that. But we bring in guests every week and some of them we've had on the show as well. We had Philip Michael come in and join us up on stage. And the great thing is that you have the ability to come up on stage and ask your questions and have a discussion. So I love the podcast format. I love that we can have these in depth discussions that I can share with you and then I get your feedback after. But the beauty of Clubhouse is again you can ask your questions live. So definitely check that out if you haven't already and hope to see some of you on that platform. So for today's show we've got a great one and I'm going to be sharing with you a panel interview that I did in coordination with Fordham's Real Estate Institute. And I have guest lectured at Fordham before. It's an incredible university. They, they offer great online courses. While many of us are still remote for a master's degree in real estate, they certainly do live classes as well. But they just put out such great content. And so this discussion was no different. The title was Envisioning the Technology Innovation and Obsolescence. There was so much great content that we actually broke this up into two panels for today's show. I, I have with us Michael Dowling, who is the president and CEO of Northwell Health, and Jeff Levine, founder and Chairman of Douglaston Development, Levine Builders and Clinton Management. And I've got to say, both of these speakers are legends in their own right. Michael Dowling at the helm of the largest hospital operation in New York. Their footprint is almost 20 million square feet. So yes, they are in the the medical and health field, but real estate is a big part of their footprint. You're going to be super interested to hear about how they are continuing to grow in response to this pandemic. How they grow moving forward. Jeff Levine is going to be talking about not only multifamily housing, but student housing, senior housing, affordable housing. This is a really incredible discussion, so I know you'll get a lot out of it. And then next week will be part two where we'll have Christopher Mills, who's president and COO of Plaza Construction, Jennifer Stewart, who is global head of real estate for bank of New York Mellon, and Mark Zulaga, who is CEO of Steven Winter Associates. So you've got two great shows coming up. We're going to have a brief word from our sponsor and we'll get right into that panel discussion.

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You are listening to Real Estate Investing live from New York. To find out more about James Nelson or avison young, visit avisonyoung.com now back to our show.

Hello, Good afternoon. I'd like to welcome everybody to this incredible webinar Envisioning the Future, Technology, Innovation and Obsolescence. We have a fantastic lineup for you of visionaries and indeed luminaries in the field who will be able to speak to these topics and look forward to taking your questions as well. I'd like to start off with Michael Dowling who is the President and CEO of Northwell Health. Michael is one of healthcare's most influential voices in the sense that he takes a stand on societal issues as well issues such as gun violence and immigration. Many health system CEOs shy away from those kind of things. As its president, he leads a clinical, academic and research enterprise with a workforce of more than 75,000 people and Northwell is the largest health care provider and private employer in New York State, caring for more than 2 million people annually through its vast network of more than 830 outpatient facilities and 23 hospitals, all of which of course occupy vast amounts of real estate. Fun fact, in 2019 more than 38,000 babies were delivered at a Northwell facility and they handled 865,000 plus emergency room visits. Northwell also has the largest hospital based laboratory in North America. Our second panelist is Jeffrey Levine who is the founder and Chairman of Douglaston Development, Levine Builders and Clinton Management. Levine has directed a new construction and rehabilitation of thousands of residential units, including both affordable and luxury housing, student housing. That's good to hear. Hotels, senior living. That might be good to hear also as the years go by. Healthcare facilities and millions of square feet of commercial, retail, office and institutional space. Most recently he developed the Edge, which is along the Williamsburg waterfront in Brooklyn. A beautiful strip I might add. It's a 1.5 million square feet mixed use project which includes approximately 2,000 residential units, over 60,000 square feet of retail, structured parking, a a water taxi pier and a pedestrian esplanade. James Nelson is a moderator and a very accomplished one at that. He's the principal and head of Tri State Investment Sales Group, Avison Young. James leads a group of 36 professionals in the sale of multifamily office development and retail properties. And Davison Young is a full service global real estate firm with 5,000 real estate professionals located in 120 offices in 20 countries. Since its inception some three years ago, James's sales team has closed over 50 sales valued at well above a billion dollars which resulted in him being named one of Avison Young's top sales professionals, as well as being recognized on Commercial Observers Power 100 list. Throughout his over 20 year career, James has been involved in the sale of approximately 500 property and loan sales for an aggregate value of over $5 billion. And this would be a most appropriate juncture to hand it over to James. Take it away, James.

Thank you so much, Dean Davidson. And thank you to Fordham for hosting this incredibly important discussion. And just want to thank not only you but your team, Lou, Andy, Kelsey for making this all possible and really for what you do for New York and for the students. And I've had the pleasure of collaborating with you all for years and just so excited to see how you all have grown the program, especially the real estate master's program, continuing to deliver incredible content through this. So thank you for everything you do. So very excited for today's discussion. And the only thing that I would add, Dean Davidson to your bio, which is very important, is we also have a Florida amongst us. So Michael Dowling is also a Fordham graduate. So I'm sure wonderful for you all to see how some of your alum have helped lead this great city. So Michael, why don't I start with you. And Dean Davidson gave some great background of the incredible reach of Northwell. And I want to also highlight and thank you for the exceptional work that you all have done to take on this pandemic. I read that you all had treated 150,000 COVID patients. Thank you so much for everything that you and your team has done. I guess one of my first questions would be is how are you able? You have this massive network. How were you able to react so quickly and expand your services to take on this pandemic head on?

Thank you, James. And again, I'm delighted to be here with Jeff and obviously to be part of the Fordham family here. A couple of things. One, even though we are very, very, very large and we have, you know, hundreds and hundreds and hundreds of locations, it's actually one company. So we all are very integrated as a company, but not just a collection of individual entities scattered all over the place. We've got single leadership, single clinical administrative leadership, all back office functions are consolidated, one budget for the whole place, etc. So we're very integrated and a little different than most other health systems that you may be aware of. We're more integrated than them. So that is one major component. So we can act as one quickly. The second thing is that we have built up over the last 20 years we actually built up a very robust centralized disaster management capability. So we always were planning for the situation when things don't go well. So we developed this prior to 9 11. So we had to respond to 911 to source the H1N1 to Hurricane Sandy, Hurricane Irene. So we have a central command to be able to deal with situations like this. So we got our central command group together in January, two months before we had our first case. And because we're all integrated and we built this infrastructure, which is one of the recommendations I make for every company that should have this kind of an infrastructure, whether you're large or small, so that you can respond in a very, very quick way when circumstances like this occur. And on the number you just mentioned, we've actually seen over 200,000 COVID patients. And we were at the epicenter of the situation at the very, very beginning where we had over three and a half thousand COVID patients in our hospitals on a daily basis today, just in case anybody might be interested, Today we have 620 COVID patients in our whole system today. So the trends are moving in the right direction. And one last thing I would mention is that healthcare staff are unbelievably resilient and adaptable because remember, what healthcare people do on a day to day basis is they react and deal with crises all the time. So when a crisis occurs, it doesn't throw us off because that's the nature of our business. This, of course, this pandemic was a huge issue, but the same kind of mentality that you have to deal with in a trauma situation in the emergency department when something bad happens on a daily basis, you extrapolate that for the system as a whole. And that's the mentality. So having the right staff, the right attitude, positive attitude, I from day one and all of our staff were saying there is no way this crisis, this pandemic is going to beat us. No way. We have a winning culture and we win. It may take a long time, which it is, but at the end of the day you're going to win and beat this.

Wow, that is wonderful. And I love how you ended that. And certainly I'm sure a huge part of why you all have been able to really conquer this head on. So thank you again for everything that you've done, help get us through this. So Jeff, you and Michael are in different fields or different specialties, I'll say, but you have been very busy yourself as well since this pandemic. And while many have chosen to be on the Sidelines and try to sit this out thinking about how you can expand your offerings. I think maybe just to give our audience a little bit more background on you, I think, because it's not just Douglaston Development, but also Levine Builders and Clinton Management, maybe, and your latest formalized venture. I know you've been building nationally for decades, but maybe you could give our audience a little bit of an understanding of your various companies and your footprint.

Of course. Thank you, James. First, I'd like to thank Michael because I actually raised my family, my wife and I on Long island, and all three of our children were born in what are now Northwell affiliate hospitals. So thank you for the wonderful level of care you provided there.

Thank you.

In answer to your question, obviously real estate is parochial. Knowing your market is critical to being successful. But we have also become a global world and certainly a national market. I have been working in New York for over 40 years, as you said, primarily in the residential markets. Over 30 some odd years ago, we had a presence in Phoenix, Arizona, which as you may know, is the fifth largest city in the United States today and is the beneficiary of much of what is going on in terms of growth in our country. It was a red state, it's now a purple state. It is not heavily regulated. And the truth of the matter is people are moving here because of the low tax environment and the growth. So we focused out here years ago on the assisted and independent living business because frankly, it made a lot of sense going back to the baby boomers who and their parents who retired out here because of the climate and low cost of building. Going back some 30 years ago, some of the biggest builders in the United States, Del Webb among them, build retirement communities. The natural evolution for retirement communities are senior independent assisted and memory care units. So we have been building and we own and operate over 1500 units here in the greater Phoenix metro. Up as high north is Sedona, where people are very excited to visit and stay. We're currently building on the periphery of Phoenix, moving further out as the city is growing. We just recently completed a project of approximately 240 units in a town called Mesa, which is a very nice community, and Peoria, which is the beneficiary of much industrial commercial growth as well, creating the need for housing. So we're very active here in New York. We're telling a different story. We were very much aware of the supply demand collapse, so to speak, of the condo market in New York early on post the Great Recession, the lean collapse, nothing was being built A few jobs that were condos were gobbled up because demand exceeded supply. With that people created more supply and realized that demand on the uber luxury market for which they were building was not as great as they hoped. And you ended up with a glut of luxury product which is apparent in the market today. Never wanted to build to that luxury market. And I have learned that condominiums are a little bit of a gamble. You wax rich or poor with the economy and I am not smart enough to anticipate what GDP will be, what interest will be, or what psychological buyer market will be three and four and five years out. So I prefer to build rentals. Rentals allow you to have a second bite at the market if you miss it on the first go round because of the nature of the numbers. So we have concentrated on rental housing in New York, both affordable and market rate. You can't help frankly being both because the reality is by building market rate in New York need to have affordable in order to secure the necessary tax evas because of the disparity in taxation of new housing products in New York City, which is a story for another panel which needs to be corrected by our elected both at the city and state levels.

Having said that, you know, Covid did.

Initially cause us as all businesses to work from home, which mandated that we really gear up our technological capabilities, which we did. You know, today when I went into business, I hardly knew that I would have an IT department, an HR department, a risk management department. But again, as Michael indicated earlier, you have to run things from the top down, not from the bottom up. So we very quickly had all of our pieces in place. Working with the ever changing technological marketplace. Our management, company management, which is run by Ryan o', Connor, who himself I believe is a Fordham graduate who connected me to this panel, absolutely is in I say the 22nd century. We don't show an apartment, rent an apartment, pay a bill for collect rent, or submit an invoice that isn't done online, which really creates for a high level of efficiency and oversight. And it works very well. Having said that, our major market rate products. We're building 60 story building of about a million square feet over at 29th street and 30th street, over 11th Avenue, diagonally across the street from the Hudson Yards, across the street from another residential project. We built the home back in 2000 and I guess it might have been 2005 when people thought we were crazy building at that location, because Hudson Yards was not quite a vision, just a dream at that time. Having said that, I'll try to finish up because I think I'm running on that market is market that I continue to be very optimistic about. While people are concerned about work from home and people living in New York, that is not going to be our future. New York is a magnet for young, intelligent, talented people of all races and religions from all over our country and all over our world. This virus is not going to put a period in that story. It's just a common.

Having said that, I'm building that project.

Diagonally across the street from over 20 million square feet between related Brookfield, Tishman Speyer of class A office space which is all essentially rented by AAA tenants, including tech tenants like Apple and Amazon and Google. So I'm very confident that as our medical professionals like Michael help us through the vaccine to put this virus behind us, that will be back in prosperity in a very short time.

I couldn't agree more and I love that this is not going to be a period, it's going to be a comma. And could not agree with you more. I've only been doing this for a little over 20 years and I've learned never to bet against New York. We come back stronger. So wonderful to hear your perspective. So Michael, I'd love if you could tell the the audience about Northwell's footprint. Dean Davidson mentioned you have 220 primary care facilities, 52 urgent care, 23 hospitals. I think the total you gave us was 20 million square feet. And the scope, the size of your operation is mind blowing. Maybe you could give us a little bit more about the size and your footage, footprint and impact here in New York.

Thank you, James. First of all, our location, we are in Nassau, Suffolk, Queens, Brooklyn, Manhattan, Staten Island, Westchester, western Connecticut and growing. We have been growing at about a billion dollars a year every year for the past decade. And we will continue to grow. We have almost 20 million square feet, as you said, of real estate. There's about 12 million of it that is in the hospitals. We have about 3 to 4 million square feet of outpatient office space that we own. We have about four and a half million square feet of office space that we lease. And we're going to continue to expand. I mean every month we expand and just give you an idea, we hire every week between 150 and 200 employees every single week. And I know that because I meet them all every Monday morning. So we have a very, very large footprint. And you know, all of us, every business, including us right now, of course, are going through major Transformations and Covid didn't change everything, but it accelerated a lot of things. So people talk about remote work, they talk about technology. A lot of this was in play before COVID in a small way, but Covid obviously has accelerated it. So one of the issues for us right now is to figure out how many of our employees will forever be working remotely, either part time, full time, or be involved with rotating schedules. Right Now I have 10,000 people working remotely. And by the way, it's very interesting, we find that the productivity has increased, people seem to be happier and the productivity has been enhanced and that will continue. Now the question then becomes, what does that mean for the real estate side of my business? Because we are big into the. You can just tell by the numbers, we're big into the real estate arena. So what real estate did I have fully occupied a year ago that won't be fully occupied going forward? What do I do with it? Does it provide me opportunities to replace it with other functions, other revenue generating sources, etc. So those are the kinds of things we're going dealing with at the moment. But yes, we have a very large footprint and we're growing. And by the way, our capital investment for the next two years, this year through the end of 22, is $2.5 billion. And that includes obviously infrastructure upgrades to our facilities and obviously technology enhancements. And I have some major big projects going on at the moment, including at one of my hospitals at North Shore. I have a $475 million facility. The steel is already up. So I made sure that our vision and our overall strategy has not been changed by Covid at all. The timing has been changed a little bit and some of the tactical aspects have been changed, but the overall vision has remained the same because Covid is a temporary blip. You know, it was difficult and I don't want to minimize it, but we will recover from this and we might be. We'll all be a little bit different. I don't think we'll be the same exactly, but I do think we will come back strong. And I think New York, you know, that is a great book written about New York. It's the best book I've ever written about New York. And the name of it, I forget the author, but. But the name of it is the City of Dreams. And New York will continue to be the City of Dreams. And Hudson Yards that was mentioned by Jeff. I am actually taking space in Hudson Yards and I'm looking at other places around the region where I need to be Whereas today it may be a little bit dormant. Three years from now it'll be flush and I need to be there. So I look forward. I'm always thinking five years out, seven years out. As people say, you manage today, but you lead for tomorrow.

Wonderful to hear and very insightful. And I guess just a quick follow up question because I would imagine part of the challenge of thinking about your office footprint moving forward is you mentioned you have thousands of employees who are currently fully remote. Is there a plan to bring them back? And you said they're happy, they're efficient. Is there going to be some type of hybrid approach? Do you think they end up coming into the office a couple days a week? Do they stay remote or still trying to figure that out?

Well, I think it'll be an evolving. I don't think that is one simple straight answer to this. I think it will be evolving. I do think that a major portion of our employees will be working remotely forever. And I think it's going to be a hybrid because people do need socialization, they do need to get together. And one of the challenges for companies when a lot of their employees are working remotely is how do you retain the culture of your organization that is the essence of any good organization. And the culture is your personality. It's the teamwork, the collaboration, it's how you work together, it's the mission, focus, et cetera. So how you maintain the strength of that culture as you move more and more to remote. And so I do believe it will be a hybrid where you'll have some working five days a week at home, some working four days a week at home, and you'll have, I think, basically rotating schedules back and forth. I don't think it'll be completely one way or the other, but it will depend on the nature of the business. If I have billing people, revenue cycle people, that's one thing. Various ministry people obviously will be probably in and out. More so in healthcare. We're a big finance company, we're a big construction company, we're a real estate company, we are a food company because we deliver more meals than anybody else. We're a technology company, we are a vehicle maintenance company. There is very little you would want to do that doesn't exist inside a very, very large system system like us. So if you look at us that way, we're a bunch of different companies inside one company with unbelievable variability. So there's no one answer to the totality of it. There are multiple individual answers to the pieces of it. And that's how we have to be very, very creative as we go forward. And I think, by the way, one last comment I make, James, is I do believe, and I believe this firmly, that Covid has taught us all a valuable lesson. It has given us a new perspective on life. It has taught us about our fragility. Creativity and innovation is blossoming now because of the crisis of COVID And I do believe at the end of the day we'll all be better off for it. It'll be something that hopefully will be in the history books a couple of years from now. But I believe we will be better people and better companies as a result of going through Covid.

Couldn't agree more. And it's a wonderful perspective to have. And I didn't mention from the start, but for our audience, if you would like to ask questions, you can go ahead and put them in the Q and A. I can try to work them in now. But if not, we're going to field questions at 1:20. But feel free. If you have some questions that come up, go ahead and type them in. So Jeff, my question is how do you plan for residential what to build and where to build based on this uncertain office market? Because jobs that told that that's the number one driver to the real estate business, certainly multifamily. I'm sitting in my office right here at 500 35th Avenue. I have an app on my phone that shows how many people are in the building at one time. You know, we're over 30% today. That's a win. It was 9% back in January, but you know, it's still uncertain. And Michael's just said, well, you know, maybe some of our workers will continue to stay remote and maybe some of them will, I hope, will continue to live here in New York and choose here to work remotely. But as you mentioned, others might move to Phoenix. So I guess how do you look at the return to office as a driver to suggest where you should be building and what you should be building?

That's an interesting question. And obviously we make decisions as to where we're going to build based upon.

Things like economics and demographics.

New York City, as you know, has not had the exodus that has been described. Yes, many people may have left for a short portion of time, whether it's those more fortunate in the upper middle classes who have second homes, vacation homes. While you were able to work remotely, it made lots of sense to take advantage of that in connection with younger people who may have low paying jobs, sometimes in the hospitality or service Industries who were suffering financially. They might have left their apartments when they're leaving leases expired and move back with family in the suburbs or somewhere else in the States. But we're seeing that end. It's very interesting. You know, business is always about supply and demand. The reality is that going back to the second and third quarters of 2020, it was a frightening period. We did not know how extensive this virus is going to be. We certainly got mixed messages both from our scientists as well as our politicians. Now we seem to have a handle on what's happening. The vaccine is making a drastic change in the hospitalizations and thank God, the deaths. So we are seeing, based upon a slightly lower price point, both in the for sale condominium market as well as in the rental market, that the tenants are coming back. Our Brooklyn properties, which had seen occupancy fall to the high 80s during the peak of the virus, is back up in the high 90s, albeit at a few percentage points of revenue lower than.

They had been previously.

But guess what? Now that I have high occupancy again, I have the pricing power I need to get my revenue back up. I'm seeing similar results, although it was more drastic. Eminem, it was more of a temporary exit of residences in Manhattan than they were, say, in the outer boroughs because of the impression that this is more open space, more outdoors, more parks where people fled to during the virus. But the reality is Manhattan is coming back in a similar fashion and our work from home has not yet turned over. Although, as you said, going from 9% to 30% is happening. I agree that come certainly September, when children will be going back to school for real education and workers will be returning from the office to get back to that concept of camaraderie and exchange that occurs in the office.

I believe we will see ourselves get.

Back to where we were before the virus, if not more. And you're asking me what I'm doing? Obviously, I am focusing on affordable. I have always worked in New York City with the abundance of funding that is coming during this new presidential administration to New York City to help renters who are impacted by Covid to in fact, fund the capital budgets of agencies like HPD, HFA, EDC, all of these agencies are now putting out RFPs. We have a strong affordable group and we are pursuing these with real excitement because we know that the demand is there and we know that because we are. And remember, not everybody can do affordable housing because typically it involves both construction, obviously development and management. And it's a specialty business. And it doesn't allow for third party contractors or third party managers. It really is best done hands on. Again, getting through the virus. The construction business, much like the healthcare business, is really all about touching the job, touching the prospective patients. So we have always had a strong presence in the field because you can't.

Build without working in the field.

And we were also fortunate that our work was considered essential because they had affordable components, as is the healthcare business, which is always essential. So we were very fortunate to be able to work very adequately during the breakdown. Obviously we had periods where in spite of precautions taken of hygiene, of security, people did become affected, afflicted with these. Fortunately, it wasn't prevalent and we were able to work through it very well.

That's great to hear and that you continue to again build and provide these much needed construction jobs at a critical time. So, Michael, I'd love to hear about, because this panel is really about the future and how we think about construction, development, real estate moving forward. You've already been underway with renovations, new projects, and in light of COVID and thinking about how to construct or renovate these buildings differently, I'd be curious what you've learned. I know you're underway with a renovation of the Lenox Hill hospital where my first son was delivered in the midst of huge snowstorm, but nonetheless a very positive experience there. But you're now, you know, you've got a building that's over 100 years old there. I know you're, you're building in Staten island as well. How are you thinking about these, these new projects? Are you revising your plans, thinking about, you know, if there was a future pandemic, how do you build better to address that?

Yes. And just let me set a little bit of context in this part of the country in New York, and I'm talking about the hospital sector at the moment, most of our hospitals were built in the 1920s, 30s and 40s. Very few new hospitals have been built in the last 20, 30 years. So if you were building a hospital 1930s and 1940s, the water was completely, completely different from a healthcare point of view. So pretty much all of our hospitals their age goes back that far now. We've upgraded, we have remodeled over the years. But you know, my dream, I would just love to be able to completely rebuild from scratch because if you build a hospital today, it would be nothing like what we currently have. That would be very, very different because space needs are different, consumer needs are different, especially, et cetera. So as we go forward now, and I mentioned A couple of things here. One is that we have to build to be much more technologically advanced from a consumer point of view, because technology, so much is going to be accessed through technology in the future, things today that we do in person. There's going to be a whole upfront digital way to deliver healthcare in the future. Digitally, you'll go to the, you know, you'll have telemedicine in a big, big way. So you have to accommodate for this. The facilities that have the operating rooms have to be larger, common space have to be larger. Families stay in the hospitals much more now than ever before. So all of that has to be much more consumer focused. The other thing is you have to be a lot more energy efficient going forward. And we have to build now to make sure that we're completely adaptable for infection control safety mechanisms. And that's not just hospitals, by the way, as for all construction, that when you have these kinds of issues in the future, again, which we will, by the way, viruses will come back. By the way. Viruses never disappear and the COVID virus won't disappear, we'll just control it. But there will be new variants that will adapt and come forward over the next number of years. So how we protect and build for infection control safety and protection going forward in all buildings is a big part of it. And the other thing, and of course back to like to get Jeff's sense on this, a lot of housing that's also being built is housing for the older population. Because if you look at the demographics, the question that I'm in discussion with a number of people at the moment on is that if you're building housing, large housing complexes, to what extent should you put healthcare, have health care provision integrated into housing complexes so that the people who live there, especially if they're older, don't have to leave their complex to come to a place to get basic healthcare? Now that does exist in some places, but I think you're going to see more and more of that. You'll have more of an integration between healthcare delivery systems and housing development so that you bring services, the healthcare services to the housing complex rather than building the housing complex and then basically say you're on your own, you have to travel to get healthcare services elsewhere. Now that doesn't work for high end, highly specialized care like transplants and open heart surgery and that kind of stuff. But the basic run of the mill things, I think that will be much more of an integration. So the quick answer to your question is much more consumer focused, much more energy Efficiency, Efficient efficiency. Focused. Much more integration in typical housing complex and much more focused on the use of technology.

Perfect. And you alluded to something that was going to be my next question for Jeff. In thinking about how you were building senior housing in light of this pandemic, and Mike already touched on maybe some of the things that could be happening.

But.

Yes, how are you changing your plans for future senior housing?

Well, obviously, senior housing has always been a specialty area to take into consideration some of the physical limitations of seniors. Limiting things like thresholds, having walk in bathtubs and showers, using knobs and handles that are appropriate for the level of capabilities the seniors have. We also, you know, again, to maintain what was said by Michael, we have always had in our assisted living facilities, a nursing presence is required under Lawsons. But we have also worked with local affiliated healthcare institutions to give them a presence on the property. So those visits that can't occur without the need for highly specialized medical equipment, be they MRIs or X ray machines, can occur at the site, minimizing the degree of difficulty for our residents. But going on to even the marker break, what has Covid done? Obviously, everybody is concerned about the transmission of the virus. If you remember, initially, it was great concern about touching handrails, touching doorknobs, touching elevator buttons. So we are going, in a way, all of these projects to touchless type of apparatus, whether it's including technologically elevated, technologically utilized, elevated buttons. You can use your iPhone.

You can use your iPhone to open an apartment.

We've already moved over to electronic latches into apartments because people want that. Initially, the ease of utilization, but now far more so to the concept of hygiene. We are also working diligently on our ventilation and air conditioning apparatus, installing highly more advanced hepatite filters, and in some cases in our common areas, even using ultraviolet light for the cleansing of bacteria.

And virus from the air.

So it's absolutely impacting everything we're doing in terms of going forward in a positive way.

I'm sensing there could definitely be a joint venture here between Northwell and Levine Builders. So you heard it here first. Wonderful that you all are both looking to solve how we build smarter for the future.

Separate entities like housing. Housing promotes good health in many ways. If you take a very, very broad view of health, which is what I'm trying to take here, is that health is what people do for themselves. Health is about employment. Health is about housing. Health is about the general condition of life overall. So health is more than just treating illness. We've been primarily for the years in the medical treatment field, we treat you after you get sick. But we have to pivot to a world where we are much more part of the teams in the community that deal with prevention and all of the other social determinants, lifestyle issues. 80% of health care is in many ways caused individually by people themselves. How they eat, how they exercise, how they don't do those kinds of things where they live makes a difference. So when people call, we say, northwell Health. Yeah, we want to be in the healthcare business, and that's what we want to be, which means working with people like Jeff and others on a lot of the things they're doing. But primarily, we have been in the world of medical treatment. And this is the reason, for example, that I have been very, very out front in the area of gun violence. Gun violence, to me, is a health issue. It's a public health issue. So is environmental health. So if we broaden our horizon here and we think of health in its broadest context and not just what happens in a doctor's office and happens in a hospital, that's a piece of it, but it's the other piece outside that makes the greatest difference in people's lives, in people's lives.

If I can add something to that.

Please do.

Yes. Of health being fabric of everyday life. As a young boy, I had the opportunity to live at a New York City Housing Authority development in Brooklyn, the Linden Houses. I actually have the good fortune now, as a business person and a developer, to be involved in the privatization and renovation of that property. And I will tell you what we're doing there. Is well publicized for many years that nycha, as a result of a lack of appropriate funding, has been unable to maintain those properties in the necessary way. You know, from things as rudimentary as heat and hot water being available or not available at certain times. But the ramifications of that lack of maintenance has resulted in physical problems that are detrimental to the health of the occupants, whether it's water leakage through the roofs, the windows, in the masonry that cause mold and fungus, that cause disease, or the lead paint, which was not known to be as threatening to people some 40 or 50 years ago as is known to be today, or asbestos that was on the pipes. So it's critical for us to make sure that the housing that we live in is providing a benefit to our health, not a detriment.

Well said. And I think it's really important, you said, to take a step back and take a much broader view. Thank you for the perspectives There. I know I'm already over the time limit for our initial panel. I want to get to some of these questions, but Michael, thinking about moving forward and how drivers for New York's recovery and originally Wall street, and then it was tech that came here and now thinking about medical and especially life sciences. And I know you all built, I believe, 137,000 square feet of new lab space last year. And I know New York has received a little bit, I don't want to say criticism, but it seems like maybe we're a little bit late to the party. Boston has this thriving life sciences practice, but now I'm starting to hear a lot more developers talking about conversions. I'm just curious your thoughts on how big the potential is for that space. How much need could New York be the predominant market for life sciences moving forward?

I think New York should become the epicenter of life sciences. That should be the goal. I think that requires some visionary thinking by government. It requires that Long Island, New York City, Westchester see themselves as one. So we're not competing with each other on this space. Also, we have to project a sense of optimism about New York. I think that's very important. Now. You hear, you pick up the newspapers, you hear about certain people fleeing New York and yeah, you always get that happening. But I do think that also Boston leadership positions have to project that sense of optimism about New York. And we've got to be careful about the perspective from government these days. I mean, you have to be careful about taxes, you have to be careful about the proper kinds of investments. You have to be sure that going forward that we have a much more balanced view out of Albany so that they understand the purpose of business, the importance of business, understand who generates the revenue so that we can do all of these other good things that people want to do. You know, there is a swing left. They call it progressive. That's fine. I'm all for progressive as long as it doesn't undermine the essence of your basic business enterprise. You know, having very far left agendas is fine, but it has to be built on a foundation of strength and economic strength. And we've got. The other thing I will mention here is that you and this was done during COVID At the beginning of COVID we were able to be extremely, extremely creative and innovative. And we handled it pretty well. Is because most of the regulations were relaxed, the governmental regulations so allowed us to be innovative. We had to be very careful about the regulatory power of government. And I do believe that if you put a stronghold on Innovation in the private sector and the not for profit sector. You're going to restrain progress and that's going to be very, very dangerous. I worry about that. Given the politics in New York right now. I really worry about it. And this is why you need a strong governor that can balance between a legislature that is a very different legislature than existed, you know, five years ago. We have to watch the politics of our environment. That can take us in the wrong way unless we're careful.

Well, I hope that message is heard loud and clearly. And I know we have some of our friends from the press with this here today. And so that is definitely some wonderful advice on how to get New York moving again and to become remain the epicenter of the world. And so I'm seeing a couple of questions that seem very technical in nature. And we are going to have a panel after this with Chris Mills, who's President CEO of Plaza Construction. So I'm sure we'll be able to field some of those questions on the next one. But just in the interest of time and Jeff to help close us out. And again, trying to end on a positive note here because Michael does bring up a good point about the regulatory environment and getting the right incentives to build. And, and look, no one denies that New York has an affordability issue. We need more housing. There's a lot of stuff that's been, you know, and you've been following it over the years, challenges. And so I don't want to get too micro on some of these challenges. But again, you are moving forward with a project with the Botanical Gardens. You're delivering affordable housing. And it's not just, you know, at that high level. I mean, this is deeply affordable housing. So clearly you were able to figure out how to do this with a private public partnership. So I'm hoping we can figure out a way to continue on this track record to grow. And so any words of wisdom or advice that you could tell our elected officials on how we can continue to deliver this much needed housing?

Well, absolutely. The reality is that creating housing is just an exercise in economics. You have to balance the revenue with the cost. And obviously the agencies are trying to target the lower economic bands, which is where the most housing homelessness issues evolve. Those people who are at the lowest end of the economic ladder. And in order to do that, it has to be done cost effectively. It is done often through this RFP process, the request for proposals where, you know, competent developers can secure the necessary financing as well as create products on a cost effective basis. I think that has to continue. And I think that money, which is necessary because obviously if on an ordinary basis you need something in the vicinity of $4 a foot a month or $50 a foot a year to do a project that will balance out economically, then you, if you're only going to be charging in some cases, 15, $20 annually a year, somebody has to step in and fill the gap. Part of that is filled in by tax abatement. Part of that is filled in by subsidy or below marketing. But the effort has to be continued because it's a lot cheaper to put people in housing that is high quality than to deal with people who are, because of what life has dealt them in on the street, in a homeless situation, sometimes suffering psychological issues as a result of what has happened to them and often resulting in violence on the city streets, which is not positive for the future of our city. So I hope our elected will continue to support these efforts, which I have to say, under the administration of Vicky Bean, who is the deputy mayor who deals with housing and economics, has continued even in the virus, in the pandemic, to do a very productive job.

This has been an incredible conversation. Gentlemen, thank you again for everything you're doing for New York and for Fordham and such an important discussion that we're having today and really some much needed optimism for the future. So we just want to thank you again for joining us today.

Thank you for tuning in this week to Real estate Investing live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast on Wednesday mornings at 7:00am Eastern Time and 4:00am Pacific Time, as well. As Always on Demand. We'll talk again next week.

SA.