NEW YORK CITY—A hot, growing neighborhood in Queens, NY. An industrial building for sale. A health system's desire to offer convenient outpatient services in the area. A real estate company with a long history of investing in healthcare facilities.

All of these factors came together recently in a real estate transaction that should pave the way for a future  specialty ambulatory care center in Long Island City. It will be operated by NYU Langone Medical Center, located in Manhattan just across the East River from Queens.

Acquiring the two-story, 45,000 square foot industrial property was an affiliate of New York-based real estate private equity firm Norvin Healthcare Properties. The transaction was valued at about $66 million, or $1,467 per square foot.

Norvin says it purchased the property at 21-21 44th Drive in Long Island City and subsequently signed the medical center to a 31-year triple-net lease.

Records on file with the New York City Department of Finance list the seller as Hazy Realty LLC of Elmhurst, NY, managed by Kyu Heung Park. Documents also indicate that Wells Fargo Bank Northwest NA provided a mortgage of about $65.5 million.

Norvin officials say they are serving as the lessor only, as NYU Langone will be responsible for the redevelopment of the property; the medical center has not released details of its plans.

Norvin president Norman K. Livingston told Healthcare Real Estate Insights^™ that NYU Langone's planned multi-specialty ambulatory care facility will provide “exceptional healthcare in a strategically located section of one of New York City's fastest-growing neighborhoods.”

Mr. Livingston's firm has concentrated on the healthcare sector since 2002, quietly assembling a portfolio totaling more than 2 million square feet, including hospitals, clinical and diagnostic facilities, medical office buildings (MOBs), and healthcare administrative buildings. 

“Consumer demand for convenient, high-quality, cost-effective healthcare has created an urgent need for providers to bring full-service, multi-specialty outpatient centers to their communities,” he says. “This new NYU Langone facility in Long Island City will satisfy that need in terms of both location and the comprehensive range of healthcare services that will be offered under one roof.”

As of last fall, there were other, non-medical plans for the future NYU Langone facility site. New York-based developer Slate Property Group, in partnership with private equity giant The Carlyle Group of Washington, DC, planned to raze the existing building and construct an eight-story, 88-unit residential condominium building.

Slate and Carlyle had the property under contract, Mr. Livingston says, when the NYU ambulatory care center opportunity presented itself. Norvin's executives worked with the condo developers and NYU Langone officials to negotiate the lease for the property, with Norvin eventually taking over the contract.

The property is in the heart of fast-growing Long Island City, which has experienced tremendous growth since a 2001. Since then, the area has seen the addition of almost 8,300 new residential units, 24 hotels with more than 2,100 rooms, and 2 million square feet of new office space. More projects are planned or under construction.

John B. Mugford is the editor of Healthcare Real Estate Insights™, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com.