The Real Deal New York

Former Elmhurst hospital sells to Asia investor group for $55M

January 02, 2014 04:45PM

Steven Wu and a group of Asia-based investors have paid $55 million for a former Queens hospital, which they plan to turn into an apartment building.

The building at 90-02 Queens Boulevard in Elmhurst, formerly part of St. John’s hospital, is roughly 260,000 square feet in size. The purchased parcel also includes a five-story parking garage across the street at 87-28 58th Avenue, which will remain in its current state to provide parking for the converted apartment building’s future tenants.

The former owner of the hospital building, Jack Gutman, purchased the property for less than $20 million in 2009, Crain’s reported. Former operator Caritas Health Care closed the facility after filing for bankruptcy, and Gutman gathered up city variances to convert much of the property into residential. Some of the conversion work has already begun, such as the demolition of the building’s interior and new window installation.

“The residential market has been rapidly appreciating though and I think this was a situation where the seller saw he could profit by selling the building rather than doing the entire conversion himself,” said Joshua Zegen, a co-founder of Madison Realty Capital, which provided a $38 million bridge loan to Wu for purchasing the property. “Brooklyn and Manhattan are so pricey, people are looking for another alternative and increasingly, they’re buying in Queens.”

The purchase also marks the latest in a string of former hospitals-turned-residences, such as the Rudin family and Eyal Ofer’s St.Vincent’s Hospital, aka Greenwich Lane, in the West Village. A plan to sell Long Island College Hospital to residential developers is also in discussion, and Mount Sinai is mulling over the sale of two St. Luke’s Hospital buildings in Morningside Heights.[Crain’s]Julie Strickland