Extell Development to Build $500M Manhattan MOB

Initial rendering of 403 E. 79th St. Image credit: Perkins Eastman Architects 

Extell Development Co. will be developing their first medical office building in Manhattan’s Upper East Side. The company intends to break ground on the 400,000-square-foot development at the end of the first quarter of 2022, with completion slated for early 2025. The project has an estimated price tag of $500 million, according to the New York Post.

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Designed by Perkins Eastman Architects, the 30-story building will rise at 403 E. 79th St., on a full block consisting of 10 different parcels put together by Extell in more than 10 years. Project plans feature oversized windows and efficient, mostly column-free floorplates, as well as below- and above-ground retail.

The building’s specifications also include post-COVID-19 enhancements and specific health-care solutions such as increased ventilation and enhanced filtration. In addition, the facility will accommodate the Department of Health’s and Article 28’s requirements for uses such as ambulatory care and surgical facilities.

The development site is less than 2 miles from the borough’s downtown along the East 79th Street corridor, having several hospitals and research centers within a 1-mile radius. The location is also less than 1 mile north of the 403,000-square-foot Hunter College Science and Health Professions Building, a 16-story development at 524 E. 74th St., bearing an estimated 2022 delivery.

In fact, the Hunter College project is the largest of only two medical office facilities currently under construction in Manhattan, according to CommercialEdge. The second one, an 89,000-square-foot build-to-suit for Mount Sinai Health System, recently received $44 million in construction financing from JP Morgan Chase.

A prestigious anchor tenant

The Hospital for Special Surgery will anchor the Upper East Side building upon its completion. The oldest orthopedic hospital in the U.S. will occupy roughly 200,000 square feet across the facility’s first eight floors. Situated less than 1 mile from HSS’ main campus, the space will house physician offices and ancillary services for treatment of musculoskeletal conditions.

Louis Shapiro, president & CEO of HSS said, in a prepared statement, that the lease represents an important step in the transformation of their main campus, complementing the construction of the HSS Kellen Tower. The 12-story, 94,000-square-foot medical office building is currently underway over the FDR Drive, between East 71st and East 75th streets.

Avison Young President & Managing Director of New York City Operations Mitti Liebersohn and Principal & Tri-State Chairman Arthur Mirante assisted HSS in the lease negotiations together with the hospital’s in-house team of Michael Calabrese, Stephen Bell and Stacey Malakoff. Extell had in-house representation, with the participation of Avison Young Principal Vincent Carrega.