Essex Crossing Locks in NYU Langone with 55,00-SF-Lease
NYU Langone Medical Center has finalized a 15-year lease at Essex Crossing on the Lower East Side, a spokesman for Delancey Street Associates told Commercial Observer.
While initial reports on the deal first surfaced in August, it finally closed two weeks ago, with NYU Langone’s Joan H. and Preston Robert Tisch Center set to occupy 55,000 square feet across three floors at Site 6 of the mega-project, said S. Andrew Katz, a principal at Prusik Group and a partner on the development team.
Prusik, which is an affiliate of Taconic Investment Partners, is working on the office and retail leasing of the nine-building, 1.87-million-square-foot mixed-use development, which is headed by Delancey Street Associates (a partnership between BFC Partners, L+M Development Partners and Taconic).
“To us, NYU is one of New York City’s pre-eminent medical institutions,” Mr. Katz told CO. “When we started thinking about having a medical user as part of the overall project, they were clearly one of the names on the top of our list if not the top name.”
There were no brokers involved in the deal.
The medical center is slated to open in late 2018 and will provide urgent care and multi-specialty physician practices, according to information provided by NYU Langone.
While a spokeswoman for NYU Langone said that there are currently no further details about the space available, previous stories—which originally estimated that the medical center would take over roughly 40,000 square feet in the building—said the facility would host about two-dozen doctors with services ranging from primary care to plastic surgery.
“We are excited to be a part of this project and are looking forward to bringing a world class ambulatory care center to this rapidly expanding neighborhood,” Vicki Match Suna, a senior vice president and the vice dean for real estate development and facilities at NYU Langone, said in prepared remarks.
Site 6, which is located at 175 Delancey Street at the intersect of Clinton Street, will also contain 100 senior units marketed as affordable; a 13,000-square-foot community center run by Grand Street Settlement; a 4,000-square-foot outdoor garden; a 24,000-square-foot educational facility and 6,000 square feet of retail space. Upon completion the structure will total 138,000 square feet and will be LEED-certified.
“It’s clearly fantastic to have an institution like NYU involved and from just a general standpoint we saw a hole in this market where we really felt the community needed doctors offices and services that NYU can provide,” Mr. Katz said. “When you talk about responsible development and doing great things, this is sort of a dream come true, [being] able to do senior housing and medical.”
Construction on Site 6 began in late fall and Delancey Street Associates closed the site’s $79.5 million financing package last month, as CO first reported. Wells Fargo led the deal, which included a $26.4 million construction loan—$6 million of which was provided by nonprofit Low Income Investment Fund—and $11.7 million in New Market Tax Credits for the commercial portion of the mixed-use building. The San Francisco-based bank also provided a $16.9 million construction loan and $11.5 million in Low-Income Housing Tax Credits on the residential component of the site. Wells Fargo will eventually invest a total of $25.8 million LIHTC equity on the 15-story building. Additionally, Goldman Sachs provided DSA with roughly $13 million in equity.
As for the rest of the massive development site, Mr. Katz said there is still a fair amount to lease, but with NYU Langone’s lease finalized, the developers now have an anchor tenant at each building. Those anchor tenants include Splitsville Luxury Lanes which signed on for 17,000 square feet of space at Site 1 and Planet Fitness which inked a deal for 22,000 square feet on the second floor at Site 5.