Three years ago, Mount Sinai merged with Continuum Health Partners, giving the hospital a huge and valuable real estate portfolio in lower Manhattan. But it's unclear what Mount Sinai will do with all of its properties now that it's downsizing Beth Israel.
In an interview with Crain's earlier this week, Mount Sinai CEO Dr. Kenneth Davis reflected on the merger. Did he regret the deal? "No, and here's why," he answered. "What came with the Continuum merger was a fantastic ambulatory footprint downtown with 16 [outpatient] sites." Among the sites is the Phillips Ambulatory Care Center, a 275,000-square-foot facility at Union Square, he said.
Mount Sinai also has about 80,000 square feet at Google's headquarters on Eighth Avenue, added Davis. It inherited the space from Beth Israel, which became a part of Mount Sinai as a result of the Continuum merger.
Many of the former Continuum properties provide Mount Sinai with the space it needs to increase outpatient visits. "We had one old hospital with very old infrastructure that couldn't be rebuilt. It was really waiting to be transitioned to an ambulatory model, given that health care is moving that direction anyway," said Davis. "The good fortune was that it was surrounded by the most robust ambulatory care platform I'm aware of in Manhattan."
In all, Mount Sinai has 550,000 square feet in downtown Manhattan for outpatient-care facilities, according to Davis. He did not discuss the hospital's plans for its real estate, but earlier this week the hospital put Gilman Hall, a 24-story apartment building, up for sale. The 1968-built property, at the corner of East 17th Street and First Avenue, could fetch as much as $80 million, according to one source familiar with the building. The sale of Gilman could be just the beginning, as Mount Sinai's future plans won't require as housing for resident physicians near Beth Israel.
Earlier this week, Mount Sinai announced that it would close the 825-bed Beth Israel Medical Center at First Avenue at 16th Street and reopen a 70-bed hospital and emergency room at 14th Street near Second Avenue by July 2020.
The plan will create a new entity, Mount Sinai Downtown, which will is expected to treat 1 million patients at its clinics and physician practices annually with capacity to serve another 500,000, Davis said. It will include 600 doctors serving 16 clinics and physician practices.
The time frame is optimistic given the regulatory approvals Mount Sinai must receive from the state Department of Health, not to mention the construction approvals required from New York City.
"If everything goes well, and you know the way construction goes in New York, we'd be happy to be opening this new facility in July 2020," Davis said. "It's a long way [off]."
"Mount Sinai accumulated a lot of valuable Manhattan real estate over the years" originally appeared in Crain's New York Business.