St. Luke’s-Roosevelt to Renovate 20-story Apartment Tower

The 20-story apartment building that St. Luke's-Roosevelt owns at 501 West 113th Street, across from the street from its Upper West Side campus, has a high vacancy rate and is in need of a big capital investment. The  prewar apartment building needs major electrical work, and the presence of lead paint has depressed vacancy to just 35% .The renovations, which will take approximately two years to complete, will also include updates to the building’s facade, elevators, floors, and windows, as well as a new fitness center. When demolition and renovations are completed, the building at 1080 Amsterdam Avenue will have 96 units and two commercial units on the ground floor. The building will be renamed Stonehenge 113.

St. Luke's-Roosevelt Hospital has completed an innovative, sale of a 99-year ground lease on a sparsely occupied residential tower on West 113th Street to SL Green Realty Corp.

The transaction provides the hospital with long-term revenue, generates the capital for a renovation, and at the same time allows the hospital to avoid selling off a valuable piece of real estate.

The buyer will pay $1 million in annual rent for first 22 years, when the rent increases to $2 million, with other adjustments over time. Every 25 years there will be a fair market value assessment of the property. There is a $13 million upfront payment to the hospital.

The building, which mostly consists of studios and one-bedroom units, will be remodeled with new floors, kitchens, and bathrooms. Stonehenge Partners believes that the small unit size would keep living costs low and make the building an appealing option for Columbia students.

They expect the building to attract a variety of residents, including older undergraduate students and graduated students interested in living close to campus in a newly renovated building.

The deal appealed to the St. Luke's-Roosevelt board because it did not want to completely lose control of the asset. Many developers looked at the building with architects and engineers. The proposed deal was complex, and the hospital's board carefully weighed the financial strength of the developers and their offers' financial benefit to the hospital.

In July, St. Luke's-Roosevelt closed on a deal with SL Green Realty and Stonehenge Partners.

The hospital had other residential space at 515 West 59th Street, and relocated about 65% of the tenants to that building.

When demolitions and renovations are completed at 501 West 113th Street, the building will have 96 units and two commercial units on the ground floor, all generating income for St. Luke's-Roosevelt and its development partners.

The renovations will take approximately two years to complete.

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