NEW YORK CITY-Madison Realty Capital has closed on a $38 million first mortgage bridge loan for the acquisition of the former St. John's Queens Hospital building, at 90-02 Queens Blvd., in Elmhurst, Queens.
The new funding from MRC facilitates the purchaser's plan to redevelop the 266,322-square-foot medical facility, which has been closed since its operator went bankrupt in 2009. The new ownership, a group of mostly foreign investors led by developer Steve Wu, will completely repurpose the building, creating a mixed-use project incorporating residential, commercial, and community space.
“This is a particularly exciting and interesting deal because it highlights several trends we're seeing in the market,” says Josh Zegen, co-founder and managing member of MRC. “New York has seen multiple hospital closings over the past few years, raising the issue of what happens to these large, centrally-located buildings. Investors now understand the opportunity, and they're looking to create value through adaptive reuse.”
“For MRC,” he continues, “this is exactly the kind of deal we like to finance. With our vertically integrated platform, we have the capability in-house to digest and understand complex, transitional real estate, so we don't shy away from it. Another trend we see is the continued flow of foreign investment into US real estate. In this instance a number of Chinese investors contributed equity for the deal. The twist is that where foreign funds used to flow primarily to investments in Manhattan and Brooklyn, here they went to development in Queens. Pricing in Manhattan and Brooklyn has reached the point where it makes sense to build in the prime locations of Queens, where transportation is excellent and population continues to grow. This is a large deal for Queens and I wouldn't be surprised to see more activity of this magnitude.”
The former hospital is located along Queens boulevard between 57th avenue and Woodhaven boulevard, directly across from the Queens Center Mall. The previous owners obtained variances allowing for 148,109 square feet of residential space and 118,213 square feet of commercial and community space. Once complete, the property will offer retail space on the ground floor and in the cellar, community space on the second floor, 144 residential units on floors three and six and a penthouse on the seventh floor. The purchaser also acquired the four-story, 89,601-square-foot parking garage located behind the hospital building, which offers 290 parking spaces and direct access from Queens Boulevard.
MRC completed the transaction within three weeks, in accordance with the borrower's needs, the lender reports.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
