Jan 07, 2019
NYC Health + Hospitals, GFP Real Estate (GFP), and Northwind Group announced the completion of a lease agreement for 526,552 square feet of office space at 50 Water Street. The agreement allows the public health system to consolidate multiple administrative office sites into one Lower Manhattan campus, improve operational efficiencies, reduce its office footprint by 20 percent, and reduce its real estate rental costs by $16.5 million in five years and by $203.1 million over the life of the lease. The 25-year, $758 million lease agreement was approved by the NYC Health + Hospitals Board of Directors on October 25, 2018.
With the lease transaction, NYC Health + Hospitals becomes the first major tenant that will occupy the GFP office complex at the building formerly known as 7 Hanover Square, which will be transformed into two new distinct office addresses – 50 Water Street at the base and 100 Pearl Street in the tower – each with its own entrance. 100 Pearl Street will emerge from the $250 million transformation as a class A office tower. GFP Real Estate and Northwind Group are partners in the acquisition of the Guardian Life headquarters building in Lower Manhattan.
“This new lease agreement will help us reduce rental costs by more than $200 million and bring together into one unified campus hundreds of central office and health plan staff who are now spread out across six different locations,” said Dr. Mitchell Katz, President and CEO, NYC Health + Hospitals. “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.”
“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.”
About the NYC Health + Hospitals 50 Water Street Lease
NYC Health + Hospitals, the largest public health care system in the United States, will occupy 14 floors of the 29-story building at 50 Water Street. The health system will gradually consolidate six locations into the new campus at 50 and 55 Water Street over the next five years, taking advantage of affordable rents, new infrastructure, efficient layouts, and economies to reduce its overall administrative office footprint by 20 percent.
Approximately 2,600 administrative staff and employees of the health system, including administrative staff from its central office and its MetroPlus Health Plan, will relocate from these locations: 125 Worth Street, 160 Water Street, 199 Water Street, and 33 Maiden Lane, in Manhattan; 1 MetroTech, in Brooklyn; and The Factory/Long Island City, in Queens.
About 50 Water Street and 100 Pearl Street
The reimagined property, with plans by S9 Architects and Tuller McNellus Feld, will feature newly enclosed ground floor retail with a block-long food hall component, a double-height 25-foot 14th floor leasing opportunity, and two penthouses. The first penthouse at 100 Pearl Street is a 48,000 square foot duplex with 15-foot to 20-foot ceilings topped by an iconic glass cube and an expansive 9,000 square foot terrace. The second penthouse is a shared-tenant amenity space with panoramic views and a large 5,000 square foot terrace. In addition, 100 Pearl Street’s lobby will offer hotel-like amenities, including a coffee and wine bar, seating for casual meetings and an adjacent restaurant and bar.
GFP and Northwind commenced the purchase of 7 Hanover from Guardian Life in December 2017, which has allowed the partnership ample time for preleasing and predevelopment.
This is the second major acquisition and redevelopment for the GFP and Northwind partnership. In 2014, GFP and Northwind acquired the nearby 40 Exchange Place, designed and executed a comprehensive renovation and leasing program, and refinanced the property last year.“We are excited to share our vision for 50 Water Street and 100 Pearl Street with the market,” said Eric Gural, Co-CEO of GFP. “We believe that creating two distinct office buildings, with separate entrances and identities, gives us an opportunity to satisfy very different market demands.”
“We are very proud of partnering with GFP on yet another downtown office building. The combination of vision, design and top-level execution by the team involved is completely transforming 100 Pearl Street into a very attractive office building offering unique spaces with great amenity package catering to a very wide range of tenant types,” said Ron Eliasaf of Northwind. “We are very excited about the future of financial district as it continues to establish itself as a vibrant 24/7 live-work-play neighborhood.”
The Newmark Knight Frank team of Brian Waterman, executive vice chairman, and Ira Rovitz, senior managing director, brokered the transaction.
The team of Hal Stein, Andrew Peretz and Ben Shapiro will serve as exclusive leasing agent for 100 Pearl Street, and Benjamin Birnbaum for the Ground Floor retail spaces.