Sales by Nonprofit Groups Quadruple Over Three Years

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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The nonprofit industry is a large segment of the New York economy. To the surprise of many, in this business cycle, nonprofit leaders are following the lead of seasoned real estate investors and taking advantage of the market to maximize the value of their assets by selling a significant amount of real estate.


As I reported in April, Cushman & Wakefield said nonprofit groups sold real estate valued at $147.6 million in 2001 in Manhattan. By 2004, that amount had nearly quadrupled to $581.6 million. During the same period, the number of sales by nonprofits in Manhattan nearly doubled, to 31 in 2004 from 17 in 2001.


The Anti-Defamation League has owned an office building at 823 U.N. Plaza, at the corner of East 46th Street and First Avenue, for more than 50 years. Last week, the Macklowe Organization entered a contract to buy the 200,000-square-foot office tower for $100 million, or $500 a developable square foot. According to industry insiders, the new owner will demolish the tower to build a residential condominium tower. The property is directly across the street from the United Nations and the Trump World Tower.


New York Law School was established in 1891 and is located in TriBeCa. Last week, the law school announced that it was selling a 12,500-square-foot site at 57 Worth St., which currently houses the Mendik Law Library, and an adjacent parking lot site. The purchaser is Tishman Speyer Properties, which will pay about $153 million, or $500 a developable square foot, for a site that will probably house residential condominiums.


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One of the most desirable areas for residential condominiums is near the Time Warner Center and Lincoln Center. Fordham University has retained a real estate investment sales company to sell two Amsterdam Avenue development sites with a total of about 700,000 square feet at West 60th and West 62nd streets. According to industry insiders, the sites, which will be developed into residential condominiums, could fetch close to $300 million.


Touro College has campuses all over New York City. A few years ago, the college built a 73,000-square-foot academic center, named the Lander College for Men, in Kew Gardens, Queens. The college sold a portion of the land to the Dermot Company. On the property, Dermot developed two 14-story residential rental towers with 388 units and 12 townhouse condominiums. Touro is the owner of a residential site on West 60th Street near West End Avenue. On this site, a residential developer is building a 20-story tower with 95 luxury units and, in partnership, Touro will provide student housing for Touro’s Lander College for Women.


Health care institutions also have been active in selling property. In July 2004, Mount Sinai Medical Center sold a residential rental building at 1200 Fifth Ave., to a partnership that included the Chetrit Group, Lloyd Goldman, and Stanley Chera for $62 million. Continuum Health Partners is a partnership of Beth Israel Medical Center, St. Luke’s-Roosevelt Hospital Center, and Long Island College Hospital. In August 2004, Beth Israel Medical Center sold its Singer Campus (formerly Doctors Hospital) at 162-71 East End Ave. to New Jersey-based Garden Homes for $166.6 million. The hospital has been demolished to make way for a residential condominium building overlooking Gracie Mansion. According to industry insiders, Long Island College Hospital is in negotiations with a number of residential developers to sell property on its campus in its Brooklyn Heights/Cobble Hill section of Brooklyn. Last year, FC Beekman Associates, LCC, an entity owned by Bruce Ratner’s Forest City Ratner Company, paid $84 million to purchase the parking lot adjacent to the NYU Downtown Hospital. Early next year, construction is scheduled to begin on a 75-story mixed-use tower. The facility will be the home of a new public school, as well as about 25,000 square feet of space for the hospital. The tower will have a residential component of about 250 condominium and 400 rental units.


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Saint Vincent Catholic Medical Centers was established in 2002 as a result of the merger of Catholic Medical Centers of Brooklyn and Queens, Saint Vincent’s Hospital and Medical Center of New York, and Sisters of Charity Healthcare of Staten Island. It is sponsored by the Roman Catholic Diocese of Brooklyn and Sisters of Charity of New York and includes eight hospitals. On July 5, the system filed for Chapter 11 protection, saying it had more than $1 billion in long-term debt. Last year, the system closed St. Joseph’s Hospital in Flushing, Queens, and prior to the bankruptcy filing, planned to close St. Mary’s Hospital in Brooklyn and Bayley Seton Hospital on Staten Island. In March 2005, Massey Knakal Realty Services sold St. Joseph’s Hospital for $10 million. Insiders say the system is negotiating sales of the two other hospitals to investors who will probably convert much of the property into residential rental units and condominiums. Earlier this year, Cabrini Medical Center sold an off-site medical facility on Second Avenue to a residential developer for about $14 million. Last December, New York United Hospital Medical Center of Port Chester filed for bankruptcy protection. The hospital is scheduled to close, and the prize real estate asset will most likely be sold for a mixed-use retail and residential development.


Churches all over the city are being converted into residential condominiums. A partnership of Jon Kully and Mick Walsdorf has recently acquired the Washington Square Methodist Church building at 134 W. 4th St., between Avenue of the Americas and MacDougal Street, for $9.75 million. The new owners plan to retain the landmark exterior and develop the property into eight luxury condominium units. The Sacred Heart Roman Catholic Church administrative office and parochial school has been headquartered at 309-317 E. 33rd St. Insiders say a residential condominium developer will be developing the site. A few weeks ago, Massey Knakal sold a two-story building with a parking lot at 75-11 Rockaway Boulevard at 91st Avenue and 76th Street in the Woodhaven section of Queens. The property was sold by a Brooklyn church for $1.1 million, or $118.28 a buildable square foot. A development site located in Rockaway Beach, Queens, owned by the Diocese of Brooklyn, is in contract to be sold for $1.46 million.


St. Ann’s Church at 124 E. 12th St., which served as the home of Jewish, Protestant, and Catholic communities, dating back to when it was first built in 1847, was sold to Hudson Companies Incorporated for $15 million. The developer plans to convert the property into a luxury condominium building.


Residential developers are in partnership with a number of churches. In many instances, the property has been sold to make way for residential condominiums, a practice especially prevalent in Harlem.


At least four office buildings owned by nonprofit organizations in the Murray Hill, Midtown South section of Manhattan are being marketed for sale. Sources indicate that these buildings, which should fetch at least $300 a developable square foot, will be sold to residential condominium developers.


Based on early sales results, more than $18 billion of commercial real estate will be traded in the city this year. A large component of the sales will result from nonprofits selling valuable, underutilized properties in order to gain significant financial appreciation.



Mr. Stoler is a television broadcaster and vice president at First American Title Insurance Company of New York. He can be reached at mstoler@firstam.com.


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