NEW YORK CITY—NYU Langone Medical Center has purchased the leasehold interest in 333 E. 38th St. from SL Green for $145 million. With 476,227 rentable square feet, the office building sits at the corner of East 38th street and First avenue and anchors the medical center’s burgeoning ambulatory corridor.
Since signing its first lease in February 2006 for a portion of the fourth floor, the medical center’s occupancy has grown to more than 170,000 square feet with its Center for Musculoskeletal Care, Outpatient Surgery Center, and a parking garage, an important amenity for its visitors. The purchase Immediately affords the medical center greater operational control and significantly reduced occupancy costs, according to Cushman & Wakefield, which represented NYU Hospitals Center in the traction.
The Cushman & Wakefield team was led by Bruce Mosler, chairman of Global Brokerage and Mark Mandell, along with Michael Rotchford and David Heller of the firm’s corporate finance and investment banking group, represented NYU in the transaction. Additionally, Andrew Weiner of Dentons, a global law firm, negotiated the deal on behalf of NYU.
“We’re proud to have represented NYU Langone in this transaction, which allows it to take control of a building that serves as such a critical asset for the medical center,” says Mosler. C&W declined further comment.
NYU Langone is composed of four hospitals—Tisch Hospital, its flagship acute care facility; Rusk Rehabilitation; the Hospital for Joint Diseases and Hassenfeld Children’s Hospital—plus the NYU School of Medicine.
The 333 E. 38th St. leasehold was part of the original SL Green portfolio at the time of the company’s IPO in August 1997. In September 2012, SL Green completed an extension of the ground lease to 2087.
“With the ground lease extension in 2012, we laid the ground work to unlock substantial value in the building,” says Isaac Zion, SL Green co-CIO. “We believe this is the ideal time to monetize our position and redeploy the proceeds into another value generating asset. We’ve built a solid relationship with NYU Langone Medical Center and are happy to see them take control of this asset.”