Mr. Doctrow: That's fair to say. I have been an analyst covering health care REITs since 1997, and then a little later, senior housing. From 1988 to 1997, I was with Legg Mason in the real estate consulting group and, among other things, I did work on senior housing. I have been on the board of a not-for-profit that developed a few hundred units of senior housing. I have been involved with my own parents going through both assisted living and skilled nursing. And my earlier career was in the public sector in housing, housing finance, that sort of stuff. So I'm definitely not a prototypical MBA stock analyst. My undergraduate degree is in social and behavioral science, and my graduate degree is a master's in public administration.
TWST: Given your depth and breadth of experience following this industry - and I
use the term health care to include senior housing among the different types of
facilities - how would you say this industry has evolved over time?
Mr. Doctrow: In the public sector, you are primarily talking about the health
care REITs. But there also are a variety of operating companies that own a fair
amount of health care real estate - the facility-based providers, private-pay
senior housing, skilled nursing, hospital companies as well. I think probably
the most dramatic change is health care REITs have come into their own as a
sector. When I started covering it, health care REITs were a pretty odd
commodity. They were, I think, something on the order of 5% or 6% of the NAREIT
Index, and they were not included in most of the real estate indexes because
they were considered something different. And what you have now is the health
care REITs alone are about 15% of the NAREIT Index. Three of them are S&P 500
stocks, which is kind of remarkable given where they started. So it's become
much more respectable, much more mainstream. I think health care real estate
truthfully has always been a very significant asset class, but much less of it
has been in the public markets. And as the health care REITs have grown
significantly over the last 10 years or so and come into their own, I think it's
been much more recognized as a significant investment class for the public
markets.
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