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Mount Sinai's Valuable Manhattan Real Estate

When Mount Sinai merged with Continuum Health Partners three years ago, it gained a valuable real estate portfolio in lower Manhattan. Now, as it is downsizing Beth Israel, the question is what it will do with all the properties. Manhattan real estate is notoriously scarce, and the hospital has made clear its intentions to increase its capacity for outpatient visits. 

Dr. Kenneth Davis, CEO of Mount Sinai reflected on the merger during an interview with Crain’s. When asked if he regretted the deal, he answered:

"No, and here's why. What came with the Continuum merger was a fantastic ambulatory footprint downtown with 16 [outpatient] sites.”

He also said that among the sites is the 275,000-square-foot Phillips Ambulatory Care Center at Union Square. According to Dr. Davis, the hospital owns about 80,000 square feet of space at Google headquarters in Manhattan’s Eighth Avenue. Mount Sinai has a need for more space in order 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.

Mount Sinai owns a total of 550,000 square feet in downtown Manhattan for its outpatient-care facilities, Davis told Crain. Earlier this week, Gilman Hall, a 24-story apartment building was put up for sale by the hospital. Although Davis didn’t discuss Mount Sinai’s real estate plans, the Gillman Hall, built in 1968 at the corner of East 17th Street and First Avenue, could earn as much as $80 million for the hospital.

Mount Sinai announced this week its plans to close the 825-bed Beth Israel Medical Center located at First Avenue and 16th Street and reopen a 70-bed hospital and emergency room by July of 2020. This new establishment will be called Mount Sinai Downtown, and the new facility, which will include 600 doctors in 16 clinics and physician practices, is expected to treat 1 million patients annually, Davis said.

Now Mount Sinai must receive regulatory approvals from the state Department of Health and construction approvals from New York City in order to continue carrying out their plans. 

"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]."

Founded in 1852, Mount Sinai Hospital is one of the largest and oldest teaching hospitals in the U.S. In 2011–2012, U.S. News & World Report ranked the hospital as one America’s best hospitals in 12 specialties.