- May 20, 2026
- Posted by: Ken Dichi
- Category: Uncategorized
Most real estate investors walk into a building and see square footage, rent rolls, and cap rates.
I walk in and see patient behavior.
That distinction between underwriting an asset and underwriting performance, is the difference between how traditional investors approach healthcare real estate and how operators like me approach it. Over fifteen years of building dental platforms, acquiring commercial properties, and growing a portfolio now exceeding $250 million in assets across the Mid-Atlantic, that distinction has been my most consistent edge.
It didn’t come from a finance textbook. It came from watching 400 patients walk through our doors every month when everyone else in the market was seeing 30.
What Traditional Underwriting Misses
Before we opened our first location in Morrisville in 2009, my brother Omar called every dental office within our target area pretending to be a patient. He had a list of about fifteen questions. Are you open on weekends? Do you take insurance? Do you offer sedation? Do you see kids?
The picture that emerged was consistent almost everywhere: limited hours, limited services, no real thought given to what it actually felt like to be a patient. So we did the opposite. Evenings, weekends, everything in-house, and a physical environment people didn’t dread walking into.
We opened and immediately started seeing 400 new patients a month. To put that in context, most practices hope for 30.
But here’s the part of that story that matters for real estate: we didn’t just celebrate the number. We studied it. We asked why. What was driving it? Which demographics? What about the location? What were patients responding to specifically?
That discipline: refusing to celebrate performance without understanding the variables behind it, became the foundation of how I evaluate real estate.
Traditional real estate underwriting is backward-looking by design. Investors study rent rolls, occupancy histories, lease expirations, and cap rate comparables. This process is necessary, but for healthcare real estate specifically, it misses the most important signal: whether the operators themselves are durable.
A dental office with a ten-year lease looks identical on paper whether it’s seeing 400 new patients a month or 30. The rent checks are the same. The lease terms are the same. But the business underneath those two scenarios is fundamentally different, and only one of them is actually de-risked.
That’s what operator data tells you. And if you’ve been the operator, you already know how to read it.
Reverse Engineering What Works
When our Morrisville location performed the way it did, we didn’t assume luck. We built an analytical framework to understand why it worked and whether we could replicate it.
What we found was that performance wasn’t random. It was predictable once you identified the right variables.
Demographic growth mattered, specifically the rate of new household formation in the area. We eventually got precise enough to know that if 4,000 new households were moving into an area per year, that market needed roughly two dental providers to serve them adequately. Most of those markets had none. That’s where we went.
Traffic visibility mattered in ways that weren’t obvious. When people drive past your location every day on their commute, they absorb the name subconsciously. By the time they need a dentist, they already feel like they know you. That passive brand recognition is worth more than most marketing budgets.
And driving behavior mattered in ways that zip codes don’t capture. People won’t cross a major road to go to a dentist. A highway like Capital Boulevard in Raleigh creates a hard patient boundary: the communities on either side behave like two completely separate markets even when they’re geographically close. We learned to map our locations around those behavioral realities rather than purely geographic ones.
We also made a deliberate decision to maintain one dental location per zip code. When a patient searches their insurance network by zip code, we want one location to appear…one clear choice, no confusion. It’s a structural decision with meaningful downstream effects on patient acquisition that most investors would never think to ask about.
These weren’t intuitions. They were variables we documented, tested, and built into a repeatable site selection system.
This is what I mean when I say operators underwrite performance. We don’t open a location and hope it works. We open a location because the data already tells us it should, and then we verify the hypothesis.
Why This Matters for Real Estate
For years, investors kept healthcare tenants out of retail environments, worried that medical uses would drive away shoppers and dilute the consumer experience. That thinking has reversed entirely. Medical tenants now commit to longer leases, pay premium rents, and can enhance the credit profile of an entire shopping center.
What changed wasn’t the tenants. It was that the market finally caught up to what operators already knew: healthcare demand is inelastic, patients are sticky, and well-located medical practices don’t leave.
Medical uses that require in-person visits for preventative care or chronic condition management including dental practices, physical therapy clinics, and chiropractors, are among the most consistently active movers into retail spaces, driven by patient preference for convenience and proximity. The data on why is straightforward: patients visiting medical providers show strong cross-shopping behavior with adjacent pharmacies and grocery stores, making well-located medtail tenants a traffic driver for surrounding retailers as well.
The operators who understand their patient base , who have built the data infrastructure, tested the hypotheses, and systematized what works, are the ones positioned to identify which specific assets will perform before the broader market catches on.
The edge isn’t access to capital. It isn’t market timing. It’s knowing what the numbers inside a practice actually mean, and building a real estate strategy around that knowledge before anyone else does.
About Dr. Hesham A. Baky
Dr. Hesham A. Baky is the Founder and Chairman of AB&B Commercial Real Estate and Vantico Investments, and a co-founder of Triangle Family Dentistry and Carolina Orthodontics & Children’s Dentistry. Since launching his first practice in 2009, he has helped scale a vertically integrated platform spanning healthcare operations, commercial real estate, and private investment. Dr. Baky regularly speaks on leadership, systems-driven growth, and operator-led investment strategy.
To inquire about speaking engagements or to connect, please contact marketing@abbcre.com.
