NYU to repurpose Long Island City industrial building for ambulatory care facility
By John B. Mugford
An affiliate of the New York-based real estate private equity firm Norvin Healthcare Properties has acquired a two-story, 45,000 square foot property in one of New York’s hottest neighborhoods in a transaction valued at about $66 million, or $1,467 per square foot (PSF).
Norvin says it acquired the property at 21-21 44th Drive in Long Island City in the borough of Queens and entered into a 31-year triple-net lease with NYU Langone Medical Center, which plans to redevelop the property for use as a multi-specialty ambulatory care facility. The acquisition and lease closed simultaneously April 10.
Norvin officials did not disclose the name of the seller, but records on file with the New York City Department of Finance, Office of the City Register, list the seller as Hazy Realty LLC of Elmhurst, N.Y., managed by Kyu Heung Park. The legal name of the Norvin partnership that acquired the property is Norvin 44th Drive LLC. Documents on file with the register’s offices indicate that Wells Fargo Bank Northwest NA provided a mortgage of about $65.5 million.
Norvin officials say they are serving as lessor only; NYU will be responsible for redevelopment of the property. NYU as not released details of its plans. But “NYU Langone’s planned multi-specialty ambulatory care facility will provide exceptional healthcare in a strategically-located section of one of New York City’s fastest-growing neighborhoods,” Norvin President Norman K. Livingston tells Healthcare Real Estate Insights™.
Mr. Livingston has ample experience with healthcare real estate (HRE). His firm has concentrated on the sector since 2002, quietly assembling an HRE portfolio totaling more than 2 million square feet, including acute and post-acute hospitals, clinical and diagnostic facilities, medical office buildings (MOBs), and healthcare administrative buildings. Mr. Livingston says the firm is the largest for-profit owner of healthcare properties in Houston’s Texas Medical Center, the world’s largest medical complex.
“Consumer demand for convenient, high-quality, cost-effective healthcare has created an urgent need for providers to bring full-service, multi-specialty outpatient centers to their communities,” he says. “This new NYU Langone facility in Long Island City will satisfy that need in terms of both location and the comprehensive range of healthcare services that will be offered under one roof.”
But as recently as last fall there were other, non-medical plans for the Long Island City property. New York-based developer Slate Property Group, in partnership with private equity giant The Carlyle Group, planned to raze the existing building on the site – which was built in 1947 – to make way for an eight-story, 88-unit residential condominium building totaling 85,349 square feet, plus 1,363 square feet of street-level commercial space.
Slate and Washington, D.C.-based Carlyle had the property under contract, Mr. Livingston says, and were planning to proceed with the condo project when the NYU ambulatory care center opportunity presented itself. Norvin executives then worked with the condo developers and NYU officials to negotiate the lease for the property, and Norvin took over the contract, he explains. Slate and Carlyle are no longer involved.
“The location is ideal” for the NYU Langone facility, Mr. Livingston continues. The property is in the heart of fast-growing Long Island City, which has experienced tremendous growth since a 2001 rezoning and designation as a central business district (CBD) of 37 blocks around Queens Plaza and Court Square opened the floodgates to redevelopment. Since then, the area just across the East River from Manhattan has seen the addition of almost 8,300 new residential units, 24 hotels totaling more than 2,100 rooms, and 2 million square feet of office space. Another 18,000-plus residential units and eight more hotels are either planned or under construction, according to the Long Island City Partnership economic development group.
The NYU Langone facility will bring needed medical services to that large and growing population, Mr. Livingston says. The project site is also one-half block from the Citigroup Building at One Court Square, and is within a two-block radius of four different subway lines.
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