Slate Property Group, Evenhar to Build Harlem MOB
J.P. Morgan is providing a $119 million construction loan for the development.
New York’s Slate Property Group and Evenhar Development have announced that they will develop a new medical office and community building for Mount Sinai Health System, at 1578 Lexington Ave. in East Harlem.
The site at the corner of Lexington Avenue and East 101st Street is only a few blocks from the main Mount Sinai Hospital campus.
The 13-story building will include 150,000 square feet of medical office space, which will focus on outpatient clinical services, and a daycare center for Mount Sinai employees.
The remaining space is for the East Harlem Center, a community hub to be operated by local nonprofit Children’s Aid, and a new facility for Life Changers Church, a long-time presence in the community. The East Harlem Center’s portion, about 19,000 square feet, will be on the lower level and up to the third floor, consisting of classrooms, a basketball court and a gymnatorium. The new Life Changers Church will be on the lower levels and ground floor.
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Currently vacant, the site was purchased by Evenhar from Life Changers Church in 2023 for about $5.9 million.
J.P. Morgan will provide a $119 million construction loan, and GoldenTree Asset Management will provide a $40 million preferred equity investment. Walker & Dunlop represented Slate and Evenhar in the financing transaction. Construction on the project is scheduled to start in September and be completed by spring 2028.
As of press time, Mount Sinai had not responded to Commercial Property Executive’s request for additional information.
The project architect, Kutnicki Bernstein Architects, was also responsible for a recent multifamily project, The Alanza, at 957 Atlantic Ave. in Clinton Hill, Brooklyn.
MOBs still mostly healthy
Although investments in the medical outpatient building sector nationwide encountered some headwinds in the first half of this year, “several positive trends signal growth opportunities for the remainder of the year,” according to a midyear report from Cushman & Wakefield. “Pricing has shown resilience, cap rates remain competitive, and key sectors within MOB are poised for a rebound as capital markets stabilize.”
MOB transaction volume fell by 19 percent year-over-year, to $3.5 billion in the first half, because of economic uncertainty and higher interest rates. The report noted, however, that a small upturn in the second quarter might point to a better outlook.
Cushman & Wakefield anticipates that with transaction cap rates stabilizing around the 7 percent range, investors in alternative real estate will continue to show interest in the sector.
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