NYC Health + Hospitals signed a more than 500,000 s/f lease at 50 Water Street.
The agency that operates the city’s public hospitals and clinics will use the 526,552 s/f of space to merge their administrative offices throughout the city into one campus in Lower Manhattan.
The move reduces their office footprint by 20 percent, but also lowers their rent by $16.5 million in five years and more than $203 million over the life of the 25-year lease that cost $758 million.
Dr. Mitchell Katz, president and CEO, NYC Health + Hospitals, said, “By eliminating the inefficiencies of having staff in multiple sites, we will reduce travel time and expenses, strengthen the work environment, and build a stronger operation to provide better support to our frontline staff throughout the five boroughs. And the more we save in rent, the more doctors, nurses, social workers, and pharmacists we can make available to our patients, which is our priority.”
NYC Health + Hospitals will be the first major tenant in 50 Water Street, an office complex owned by GFP Real Estate and Northwind Group.
The building, formerly known as 7 Hanover Square, will be renovated into two new office addresses, 50 Water Street and 100 Pearl Street, with separate entrances.
“We are proud to welcome NYC Health + Hospitals to 50 Water Street and have them play a key role in the continued renaissance of Lower Manhattan with their expanded commitment to the Water Street neighborhood,” said Brian Steinwurtzel, co-CEO of GFP.
“This lease signals a new era for 7 Hanover, with the creation of 50 Water Street and the tower at 100 Pearl Street.”
GFP and Northwind purchased the building for $310 million in early 2018. The deal is expected to close in October 2019 when the current tenant, Guardian Life Insurance, moves to its new offices in 10 Hudson Yards.
NYC Health + Hospitals was represented by Newmark Knight Frank’s Brian Waterman, executive vice chairman, and Ira Rovitz, senior managing director.
Waterman said NYC Health + Hospitals not only chose 50 Water Street to reduce their footprint and save some money on rent, but also because they have an existing facility across the street at 55 Water Street.
“It’s the largest relocation in Lower Manhattan in the last five years,” Waterman said. “There have not been many relocations of this size in Lower Manhattan and it just validates the growth of Lower Manhattan as a location of choice.