Gary Barnett, Pioneer Of Billionaires' Row, Bringing Luxury To Healthcare Real Estate
The father of Billionaires’ Row is taking on the challenge of bringing opulence to a different kind of setting: hospitals.
Healthcare facilities typically are sterile, disenchanting environments. But Extell Development founder and Chairman Gary Barnett plans to apply his history of high-end hospitality to a 435K SF medical office tower he's developing at 1520 First Ave.
“It is a major business with a tremendous draw for people from all over the world to come for the exceptional medical care that we have here, and it's just very, very hard for the hospitals to be able to build modern buildings,” Barnett said onstage Wednesday at Bisnow’s New York Healthcare Real Estate Conference. “We saw a rare opportunity to get a full block and be able to build something brand new.”
In typical Extell fashion, the assemblage, consisting of 10 parcels on the Upper East Side’s medical corridor, took approximately a decade to piece together, Barnett said. Roughly 100 apartments and almost a dozen retailers occupied the buildings, which had to be demolished to make room for the tower, New York Yimby previously reported.
Barnett completed his shopping spree in 2018, the same year that sales launched for Central Park Tower, his ultra-luxury residential supertall on West 57th Street.
“When we had the site fully assembled, we had to decide what to do with it. We had lots of condos, so I figured, ‘What the hell, let's build a medical center,’” Barnett said, eliciting laughs from the audience. “The truth is that we did see an opportunity to diversify somewhat, and we saw a need in the marketplace.”
He landed a $425M construction loan for the project in 2022. The 30-story mixed-use tower is expected to be completed by the end of September and will be anchored by the Hospital for Special Surgery.
HSS Medical Advisor for Strategy and Business Development Dr. Mark Bowen said his group was involved throughout the planning process, allowing them to construct rooms for three MRI machines and a shell space for an ambulatory surgery center, as well as direct patient flow.
Such input is more difficult for tenants to provide during conversion projects as opposed to ground-up development.
“We have really rethought the whole patient journey through the building,” Bowen said during the event, held at Convene One Liberty Plaza. “There's less time in a waiting room, sitting in the gymnasium, waiting to see the doctor.”
It is part of medical centers’ efforts to create less stressful environments to both attract patients and retain staff, experts said during the event. Healthcare workforce shortages have become a growing concern, with the Association of American Medical Colleges projecting a shortfall of more than 85,000 physicians by 2036.
Anchor Health Properties Vice President of Asset Management Stella Stein said some of its buildings have Zen gardens and beekeeping areas.
“It really helps with giving the patients a space to recover. It gives nurses a place to have their lunch,” Stein said. “It gives everybody that visits the building a better holistic environment.”
Similarly, Extell’s 1520 First Ave. is being built with enhanced ventilation, natural lighting and outdoor spaces, including a green roof and private terraces. Those features are being further developed with new technologies, whether that be artificial intelligence or otherwise, panelists said.
HDR Health Principal Anthony Caputo is exploring ways to improve loud environments in hospitals. Among those is adding acoustic tech in buildings that can invert waves and cancel noises in public spaces rather than just mask them.
“How do you de-stress that first moment of the patient experience?” Caputo said. “We're looking at not just the traditional sense of designing comfortable environments, where things have to be bleach cleanable and need to be maintained.”
