“Obamacare” spurs health care industry’s demand for space
From left: Mark Weiss, vice chairman of Newmark Knight Frank, 1290 Sixth Avenue and 14 East 103rd Street (credit: PropertyShark)Buoyed by an aging population, new government initiatives and, in some cases, the struggling economy, health care industry real estate activity in the city has doubled over the last year, according to the New York Times.
This year there have been 42 new leases and renewals totaling more than 1.2 million square feet, according to Cushman & Wakefield, compared to 25 transactions and 550,700 square feet in 2010, and 16 deals for 176,311 square feet in 2009.
Many of these deals, including ColumbiaDoctors’ 25-year lease for 120,000 square feet at 1290 Sixth Avenue, with rights of first offer for additional space, were spurred by an expected increase in demand stemming from President Barack Obama’s health care overhaul, the Times said. “Large medical practices are a sector of the marketplace that is often
overlooked, but there is enormous demand there,” said Mark Weiss, a vice chairman of Newmark Knight Frank who represented ColumbiaDoctors.
Similarly, as The Real Deal reported, Mount Sinai acquired a 15,000-square-foot lot at 14 East 103rd Street for $25 million that’s earmarked for future development even as it builds a new center at Madison Avenue and 101st Street.
But at present, fewer New Yorkers have insurance thanks to the economic downturn, so community health clinics are at greater demand and also require more space to meet it. East Harlem’s Settlement Health is looking to add 20,000 square feet to the 22,000 it owns at 212 East 106th Street.
While some landlords are hesitant to rent space to doctors because of the disruptive foot-traffic and the additional bathrooms and sinks needed, the high demand has brought even the largest landlords, including SL Green Realty’s 217,000 square feet-worth of leases at 555 West 57th Street, into the healthcare industry. [NYT]