SL Green Realty and Stonehenge Partners have signed a long-term lease for the land under a 20-story residential building owned by St. Luke’s-Roosevelt Hospital, in a deal that will allow the institution to retain ownership of the property and generate revenue for a much needed renovation.
St. Luke’s-Roosevelt finally signed a 99-year ground lease with SL Green and Stonehenge in July, after a year of attempting to finalize the deal at 501 West 113th Street. The hospital will receive a $13 million payment that will be deducted from the rent over time. Vacancy at the building has fallen to 35 percent. Families with children younger than seven cannot live there, due to the existence of lead paint.
Under the lease, the hospital will receive $1 million in rent until the 22nd year of the lease. Then, rent rises to $2 million, along with other adjustments. A fair market value assessment of the property will occur every 25 years. SL Green has the capital to help renovate the building, which is in need of electrical work, Crain’s said.
“This allows a long-term revenue stream and preserves the asset,” said Kenneth Holden, senior vice president of real estate and facilities at the hospital’s parent, Continuum Health Partners. [Crain’s] — Mark Maurer