Hospital Buys 430K SF of NYC's Lipstick Building for $300M
Memorial Sloan Kettering acquires two-thirds of high-profile tower from SL Green.
Memorial Sloan Kettering Cancer Center is buying two-thirds of NYC’s Lipstick Building on Third Avenue for $300M from SL Green.
The hospital is acquiring 430K of the 34-story, high-profile building, which earned its nickname from its distinctive oval shape and pink marble façade, the NY Post reported.
The building gained notoriety in 2008 when its upper floors served as the headquarters for the investment firm of Ponzi-scheme swindler Bernie Madoff before he was arrested and relocated to a federal prison.
Memorial Sloan Kettering will take the base of the building up, which runs up to the sixth floor, and several floors in the tower portion. The building’s previous anchor tenant, the law firm Lathan & Watkins, vacated the space after relocating to tower at 1271 Sixth Avenue.
NYC’s premier cancer-fighting hospital will use the space in the Lipstick Tower, located on 855 Third Ave. at East 53rd Street, to consolidate research and administrative offices.
The acquisition continues a trend of hospital campuses located uptown on York Avenue on the East Side of Manhattan expanding into additional space in Midtown.
SL Green will continue to own the Lipstick Building’s remaining 219K SF, which is 92% leased, the Post reported. Green, which assumed full ownership of the building in 2020, has been upgrading the property with new amenities and infrastructure.
The deal between the hospital and SL Green is another shot in the arm for NYC’s office market. Office leasing activity in Manhattan nearly doubled in July, surging to 3.16M SF from June’s total of 2.2M and almost 1M SF more than the activity recorded in July 2021, according to Colliers.
The overall July leasing activity in Manhattan was the strongest monthly leasing total since January 2020.
The NY Post, which called the transaction an “outside-the-box condo” deal, compared the arrangement to a January deal between the Touro College and University System and the owners of Three Times Square.
Touro signed a long-term lease to occupy 234K SF of the Times Square tower, moving seven of its schools into parts of the ground and second floors and occupying all of floors three through nine in the building.
The half-century old educational institution was given its own dedicated entrance and lobby at the southwest corner of Seventh Avenue and West 43rd St., as well as lounges, cafes and other amenities.
The other floors occupied by Touro were filled with classrooms, labs, libraries and event spaces for the estimated 2,000 students who are enrolled at schools using the building.