Development giant Hines has formed a joint venture with capital partner, Welltower Inc., to build a 15-story apartment tower for New Yorkʼs senior citizens.
The existing commercial buildings on the site, a two-story corner retail building and a separate five-story office building with multi-level retail, at 139 East 56th Street, will be demolished to make way for the new senior living community, which will also have ground-floor retail.
“With this development, Hines and Welltower aim to address the aging demographic with a new residential building for Manhattan’s vastly underserved senior population in need of assisted living and memory care services,” the companies said in a press release.
Meringoff Properties and the Riese Organization began marketing the site through Eastern Consolidated last October, according to marketing materials posted online.
The site, located in Manhattan’s Plaza District, is made up of two adjacent parcels, situated on the northeast corner of Lexington Avenue and East 56th Street and was expected to fetch upwards of $100 million.
Adelaide Polsinelli, Brian Ezratty and Ron Solarz of Eastern Consolidated represented both sides in the transaction.
The brokers said they were unable to comment on the sale, which comes in the wake of the city council’s recent passage of Zoning for Quality and Affordability (ZQA), a resolution that in part addresses the critical need for housing for the aging population of New York City, by making it easier to provide a range of affordable senior housing and care facilities.
According to the New York City Department of Aging, New York City will experience a dramatic increase in its elderly population, with the number of people age 65 and older projected to rise 44.2 percent, from 938,000 in 2000 to 1.35 million in 2030. Last summer, Maplewood Senior Living Company announced it would develop a building for seniors on the Upper East Side.
The assisted living operator based in Westport, Connecticut, purchased of a collection of five lots covering 1802-1810 Second Avenue and 303-305 East 93rd Street with a plan to construct a 20-story tower containing 214-units
Maplewood Chairman and CEO Gregory Smith said the site was being developed with Omega Healthcare as its capital partner.
According to CBRE, 2015 was a record-setting year for the senior housing sector, recording 514 institutional transactions and $18.7 billion in institutional sales.
The sector also experienced a record high per unit pricing, as well as record low capitalization rates, according to data from the National Investment Center for the Seniors Housing & Care Industry (NIC), as well as the CBRE Seniors Housing Investor Survey & Market Outlook report.
“The seniors housing landscape is evolving with the increased presence of sophisticated capital, market transparency, operational efficiencies and technological advances,ˮ said Zach Bowyer, National Practice Leader for CBRE’s seniors housing & healthcare specialty practice.
“This can be compared to the institutionalization that the multifamily sector experienced from the mid-1990s to early 2000s.”
“As the seniors housing industry evolves, it is imperative that our valuation methodologies, access to accurate information and understanding of our clients’ needs continue to evolve in step.”
Hines is a privately owned global real estate investment, development and management firm w ith $87 billion of assets under management. The company has 104 developments currently underway around the world, and has developed, redeveloped or acquired 1,100 properties, totaling over 346 million square feet. The firm’s current property and asset management portfolio includes 531 properties, representing over 186 million square feet.
Toledo, Ohio-based Welltower, Inc. provides real estate capital to seniors housing operators, post-acute care providers and health systems.