Maimonides Leases Entire Building from Joshua Markovics

Maimonides Medical Center has leased a new, 54,000-square-foot office building in Brooklyn to consolidate and upgrade back offices from several scattered locations.

Owned and developed from the ground up by Joshua Markovics of Royal Builders Development, the seven-story structure at 5402 Fort Hamilton Parkway in Borough Park includes a roof deck and 10,000 square feet of underground parking.

The hospital will also have a retail space which it intends to fill with a compatible use. Markovics, who filed permits for the project in October 2021, will complete a build-out of the space.

Brooklyn-based Nick Zweig of Locations Commercial Real Estate had relationships with both parties and was the sole broker for the 30-year, so-called synthetic lease which was created so no property taxes are incurred by the building. That is possible because the sole tenant, Maimonides, is a nonprofit, like all New York hospitals.

Zweig declined to reveal the value of the lease, but new construction with a similar buildout could rent for roughly in the $50s per foot.

Zweig acted as the broker when Markovics bought the property in 2021 for $6.2 million and scrapped a previous design. Ponce Bank provided the developer a $15.5 million construction loan.

Near the Fort Hamilton Parkway and 54th Street site, Maimonides is tangling with tenant activists at 11 buildings, seven of which it sold to Iris Holdings in 2018 for $68 million. The hospital bought the properties more than 40 years ago to house its workers, many of whom have since retired, were laid off or left for other employers.

Maimonides signed a master lease agreement with Iris and, in turn, sublets units in the seven buildings to tenants. The hospital claims its rent keeps going up but that it’s not passing along those costs — a dynamic that has become unsustainable. So the hospital terminated the tenants’ leases, which it can do because nonprofits are not subject to rent stabilization.

The institution says it has given the renters years to vacate, but many remained and now they are out of time. Tenant advocates including the Fifth Avenue Committee have rallied on the renters’ behalf.