From left: Hospital for Special Surgery, NYU Langone Medical Center and Memorial Sloan-Kettering cancer center

A number of large medical institutions on the Upper East Side have increased their footprints recently, DNAinfo reported. The latest, a new 16-story Memorial Sloan-Kettering facility proposed for York Avenue, has neighbors annoyed.

The building would add 179,000 square feet of outpatient services space for the cancer hospital, which is nearby along York Avenue. As medical institutions in New York City modernize and adapt to new healthcare policies, they may find themselves some of the city’s largest and most important real estate clients. [more]

Stephen Ross, chairman of the Related Companies, and Ruppert playground

The Related Companies is bringing a state-of-the-art cancer treatment center to its Upper East Side development site occupied by a beloved park, the Wall Street Journal reported.

The site, at 205 East 92nd Street between Second and Third Avenues, is currently home to Ruppert Playground, which Related took over in 1983 from the city and agreed to preserve for 25 years. Now that the period has expired and Related is moving forward to develop the site, neighbors are rallying to save the public space (note: correction appended). While Related is in the process of trying to find a suitable compromise with residents of the neighborhood, the firm has exceeded its legal obligation to the playground and can begin development without interference. [more]

One Park Avenue

From the July issue: “‘We are going to have a gun to our head,’” one real estate insider recalled top Vornado Realty Trust executive Glen Weiss saying, once the office giant decided to
go ahead with its acquisition of One Park Avenue.
In order to buy and recapitalize the building, Vornado had only weeks to nail down a large lease expansion with NYU Langone Medical Center, pay off mezzanine lenders, secure the first mortgage lender, and work out a deal with Murray Hill Properties and Cerberus Capital Management, the property’s owners.
It was sometime in January of this year, according to sources, that Vornado got serious about acquiring the building, which was underwater, as many Midtown properties were. One Park had been purchased at the peak of the market in 2007 by Murray Hill and Cerberus for $550 million. [more]

The major health care systems are expanding throughout New York City and beyond.

The big news this month was the bankruptcy court’s approval of the $260 million sale of the Saint Vincent Catholic Medical Center in Manhattan to the Rudin family and North Shore-LIJ. They plan to develop the first stand-alone 24-hour emergency and ambulatory surgical facility in the New York metropolitan area.

North Shore-LIJ plans to invest $110 million to renovate and redevelop the O’Toole building between 12th and 13th streets on Seventh Avenue into North Shore-LIJ Center for Comprehensive Care. [more]

Citing changing market conditions, NYU Langone Medical Center has decided to audit its current office space, according to Crain’s, with Bruce Mosler, co-chairman of Cushman & Wakefield, signing on for the task. The center, which is one of the biggest hospital operators in New York City, presently uses approximately 400,000 square feet of space (note: see clarification). “Given the current real estate market, we thought it was a good time to evaluate our space,” a hospital spokesperson said. “It’s a very complex situation.”

The competitive pool for a partnership with cash-strapped Lenox Hill
Hospital shrunk to one yesterday, when NYU Langone Medical Center
withdrew from negotiations, leaving only North Shore-Long Island
Jewish Health System in the running. NYU had been seeking a complete merger
with Lenox Hill, which would have removed control from the bulk of
Lenox Hill’s current administrators, while promoting many Lenox Hill
clinical department heads, but Lenox Hill declined to consider such an arrangement.
North Shore-LIJ’s proposal, which would affiliate the two facilities
while leaving Lenox Hill administrators in place, would not save the
hospital as much money. Lenox Hill had a $20 million operating loss last year. Nearby Mount Sinai Hospital had also expressed interest in a
merger with Lenox Hill but was never invited to submit a proposal
[Crain's]

Last Thursday, Gramercy Park’s Cabrini Medical Center filed for Chapter 11 bankruptcy protection, leaving a valuable asset for the taking. The medical center closed its doors March 17, 2008 and the following day, the 338-bed hospital handed over its 60 hospice beds to Saint Vincent Catholic Medical Centers. Cabrini was one of the five hospitals in New York City slated for closure in 2006 by the Berger Commission on Health Care Facilities. After the hospital shuttered a year ago, the facility provided ancillary health services like inpatient medical/surgical, psychiatric and rehabilitation services, and was a state-designated AIDS center. Over the past two years, Cabrini was in negotiations with Saint Vincent’s to buy two of its buildings, Crain’s reported. The most important asset of the bankrupt medical center is its 18-story hospice located at 227 East 19th Street between Second and Third avenues. Sun Life Assurance Company of Canada holds a $35.1 million first mortgage on the building. [more]