But doctors also want to be located near hospitals and that has proven to be one of the biggest challenges they face in finding new space. "The problem is that a lot of the hospitals have been acquiring space around themselves, so that kind of space is limited," says Nick Sardone, senior vice president with CRESA Partners. "We did a search about a year ago for a practice and scoured all of the Upper East Side and the major landlords out and out refused to take medical use unless it was for a floor that was already designated as a medical floor." Another broker who deals with physicians, Mona Wachtel, managing director of William B. May Commercial, advises her clients to take any space they can get and deal with the design issues later.

"Medical space is very, very sparse right now, so I always suggest that as long as they can get ground floor or first floor, they should take it and just change the identity," she says.

The pricing has also been an issue lately. Landlords in residential buildings are reluctant to admit physicians because of the excessive foot traffic and security issues their patients present, while commercial owners don't want to go through the trouble of a complicated build-out. As a result, those owners who let a doctor move into their property want to charge premium rents for their troubles.

"If you have ground floor space and if there is an opportunity for retail use that's a higher achievable rent than what a doctor can afford to pay," Sardone says. "And the new [residential and mixed-use] buildings have been designed to have big box retail, or retail use which ties into basement space and generates much more income for the owner. And with the general availability going down, there is just less space available. If a landlord is forced to choose, they'll choose a [traditional] office tenant over us."

Glenn Schor, vice president of Treeline Management Corp., whose company rents out medical spaces at such buildings as 189 Montague St. and 205 Montague St. in Brooklyn, explains the owners' point of view.

"In an office building, a doctor's use is inconsistent with the regular use. Their traffic patterns are heavy, they use the building at hours when the normal office building doesn't function and their cost of operation is high for the owner because of the build-outs they require. So it's a delicate balance to find them space. We segregate our buildings into floors where we have medical tenants and floors where we do not."

So what can physicians do when they find that they have no place to go? For one thing, commercial coops and condominiums are becoming more popular now, although they are still hard to come buy.

"Young doctors want to buy--they think of it as an investment," says Wachtel. "And a lot of them try to join forces--for example, the Corinthian Building is all medical. Doctors like to be together."

Joseph Rampolla, president of Town & Country Remodeling & Construction, Inc., agrees that buying is the best alternative. He estimates that medical build-outs in Manhattan can cost up to $200 per s/f. "[The doctor] could then sell it, instead of having to leave when his lease ran out."

Then there are developers like Josh Dolgin, vice president of Kalmon Dolgin Affiliates, whose company has a substantial portfolio of medical office buildings throughout the East Coast. Kalmon Dolgin currently owns a medical office building in the Bronx, one in Morristown and one in Verona, N.J. and is constructing a property in Hempstead, N.Y. There are even some availabilities at these building--the Bronx one, for example, has a 6,000 s/f lower level space open,--though Dolgin admits units lease in the blink of an eye.

"Many times, we have a [lease ready] before the old tenancy even left," he says. "We have a premier medical office building in Morristown which has a waiting list."

And then there is the last option left for the desperate--take whatever you can get and work around it.

"I tell clients to think out of the box--just because it's not medical space, doesn't mean it couldn't be made into one," Wachtel says. "They have a lot of consultants now who are very good at taking space that wasn't medical and changing it. It's just fascinating--I recently met someone who designs eyewear space [for the first time in my career]."

Dolgin also has some advice for those who decide to take this route--be prepared to sign a long-term lease.

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