Future of 2 Former Crozer Hospitals In Delco Up In The Air As New Owners Seek Occupants

A group of investors led by an ambulance company operator has finalized its $2M acquisition of two former Crozer Health hospitals, but it is not yet clear who will lease them.

Keystone Quality Transport owner Todd Strine told Bisnow on Tuesday he hopes both will soon have emergency rooms again as Delaware County struggles with a major care gap. It went from having six hospitals to two when Crozer’s parent company, Prospect Medical Holdings, went bankrupt last year.

“We need to bring back much-needed medical services,” said Strine, the majority investor in the two properties.

“It’s definitely true that people in Delco feel less safe,” he added. “We’ve heard from a lot of people that they’d love to see ERs reopen.”

Major regional healthcare systems and other potential occupants have toured Springfield Hospital and the former Taylor Hospital, which Strine and his partners have rebranded as the Ridley Park Medical Campus.

But the leader of one hospital system with a major Delco presence expressed a lack of interest Tuesday during Bisnow’s Philadelphia Healthcare Real Estate Conference in the Wanamaker Building’s Crystal Tea Room.

“I have spoken to every one of those investors and developers,” Main Line Health CEO Ed Jimenez said.

“It is 100% notable that not a single investor who has bought those properties has ever run a hospital,” he added. “That on its own should tell you, does it make sense or not?”

Strine declined to share who his co-investors are, but he confirmed that none of them are hospital executives.

Still, he said his ambulance experience has left him with a deep knowledge of the healthcare sector and that he is looking to be a landlord, not a hospital operator. He said he hopes to keep an open line of communication with Jimenez as he works to secure tenants.

Strine said the $2M he spent on the 165K SF property in Ridley Park and the 92K SF property in Springfield was a great deal, especially since both were secured without the debt that turned off prospective buyers during Prospect’s bankruptcy proceedings. The Springfield deal closed earlier this month after the Ridley Park transaction was finalized last year.

“Bankruptcy washes away the sins of the past, and that’s how we got these assets free and clean,” he said.

The closure of the Delco hospitals came as many hospital systems nationwide face financial issues. The situation is particularly grim in Pennsylvania, where the Hospital and Healthsystem Association of Pennsylvania predicts 14 facilities will close over the next five years.

Avison Young principal Patrick Kelley has been tapped to market the Ridley Park property. He was particularly enthusiastic about the 68K SF ground floor, which previously housed an emergency department and five operating rooms.

“Let’s try to stand that up and bring that level of service to the community, because that’s what they want, that’s what they need,” Kelley told Bisnow at the event.

Strine said he hopes to see emergency departments reopen at both properties, but he and Kelley are open to leasing space to other types of clinicians. The broker said mental healthcare providers have expressed interest in the former Taylor Hospital. Strine and his co-investors are marketing Springfield Hospital independently. 

Because they have been closed for less than a year, Strine said both facilities remain in good shape.

“Springfield is move-in ready, and Ridley Park really needs very little work to be operational,” he said.

As Delco has struggled with its emergency care gap, urgent care operators like Vybe have expanded their presence in the county. But panelists at the Bisnow event don’t believe that industry is a good solution.

“I, too, will besmirch freestanding [emergency departments] and urgent cares,” said Array Advisors President Jonathan Bykowski, who characterized them as a Band-Aid fix.

Children’s Hospital of Philadelphia AVP of Real Estate David Kontra believes the urgent care industry has expanded too fast.

“There’s always appointments available,” he said. “You wonder if we’re becoming oversaturated … It’s a relatively easy thing to bring into the market.”