"I would say it's a very small number, but a small number makes a trend," says Weiss, VP of brokerage services at CBRE. "There would potentially be a few in the outer boroughs, a couple on Long Island and maybe one or two in Manhattan." He says another possibility would be healthcare operators merging and combining operations "to solidify their balance sheets and create some synergies," which could itself lead to sales of surplus properties.
The Caritas sale, which involved the four-acre Mary Immaculate Hospital campus in Jamaica, and the two-acre St. John's Queens Hospital property in Elmhurst, produced five bidders. Winning the auction was a prominent developer and investment group led by Brooklyn-based Joshua Guttman, which plans to redevelop both sites for other uses, according to CBRE.
In a release, Weiss says the Mary Immaculate site might be redeveloped for educational, nonprofit, government or religious use. The St. John's site may be used for office building development.
The winning bid was about 80% more than the minimum, and Weiss says the bidding was "heated and highly competitive." He says one advantage of going to auction in selling properties under these circumstances is "the definitiveness of the terms of the sale. When you use an auction, you say, 'these are the terms and everybody's competing on exactly these terms.' It typically takes out contingencies."
He adds this close-ended time-frame combines with the clarity and competitiveness of bidders being in the same room. "There's a clearness to what the market consists of and people are willing to pay. It forces the result. When the market is somewhat weaker, as it is now, you're more certain of having a buyer than when things are more open-ended."
Weiss represented Caritas along with CBRE senior associate David Zelinski, SVP Philip Heilpern and EVP Richard Karson. CBRE also procured all the bidders. Caritas' legal team in the sale, as they have been throughout the bankruptcy process, included Jeffrey Levitan, Rick Zall, Adam Berkowitz and Chris Pennington, all of Proskauer Rose, LLP.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
