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MONEY

Health sector's hot real estate market

Ernie Garcia
elgarcia@lohud.com
The Benedict Realty Group of Great Neck, N.Y., has bought 90 South Ridge St. in Rye Brook and it intends to convert it into a medical arts complex.
  • Reasons for the growth include the newly insured, the region's growing elderly population and the need for lower-cost health care, among other factors.
  • The Lower Hudson Valley is also aging and older residents generally need more medical services.
  • Successful drugs and therapies are behind expansions at Acorda Therapeutics and Regeneron.

Successful drugs, the newly insured, cost-consciousness and changes in patient care are fueling expansion in the Lower Hudson Valley's health sector.

The hot real estate activity includes Acorda Therapeutics' addition at 440 Saw Mill River Road in Ardsley and WESTMED Medical Group's move into new headquarters still under construction at 3030 Westchester Ave. in Purchase. The Mount Kisco Medical Group is planning new locations in Jefferson Valley this summer and Mount Kisco in the fall, while ENT and Allergy Associates is moving into a bigger location in New Rochelle and expanding its call center in Tarrytown.

H. Guy Leibler, president of Simone Healthcare Development, said the Lower Hudson Valley is in the middle of a huge transformation of the health sector landscape and that more construction and mergers are to come.

"Health care is moving away from the hospital-centric hub, which is a high-cost provider, into a more patient-oriented, retail-minded delivery system where health care can be anything from a local walk-in clinic or urgent care center ... or an ambulatory center like the one we're building in Purchase (for WESTMED)," said Leibler.

Reasons for the growth include the newly insured, the region's growing elderly population and the need for lower-cost health care, among other factors.

On April 1 state health officials said more than 865,000 people had enrolled in the state's health insurance exchange. At a panel in March on health-sector real estate in White Plains, David Friedman, Montefiore Medical Center's director of real estate, called those new enrollees a "crush of people coming into the system."

The Lower Hudson Valley is also aging and older residents generally need more medical services. The U.S. Census noted that 14.1 percent of New York's population was 65 and older in 2012, compared with 12.9 percent of the population in 2000.

Doctors also have to keep their costs down. Dr. Scott Hayworth, the Mount Kisco Medical Group's president and CEO, said insurers, the government and the public expect doctors and medical groups to offer high quality care for the lowest price possible.

"The only way to do that is if you're larger," said Hayworth, whose company is exploring a merger with the Mid Hudson Medical Group.

One recent merger on April 1 was the Middletown-based Crystal Run Healthcare's alliance with Advanced Cardiovascular Care of Hudson Valley in Valley Cottage.

"We will be opening additional practice sites providing primary care and medical sub-specialties services in West Nyack and Pearl River within the next two months and are exploring additional locations in the county as well," said Dr. Hal Teitelbaum, Crystal Run's managing partner and CEO, in an email.

More space needed

Getting larger means renovating or building medical office space that can accommodate electronic medical record-keeping and equipment that was once kept in hospitals. That's part of ENT and Allergy Associates' announced move to a bigger space in New Rochelle at 145 Huguenot St. with better parking.

The Tarrytown-based ENTA had 28 doctors in 10 offices in 1999 and by September it expects to have 162 physicians in 41 locations in New York and New Jersey. Robert Glazer, the medical group's chief executive officer, said the growth meant building a new call center in August in Tarrytown that will eventually employ about 80 agents handling all the locations' calls in order to create more efficiency and a better patient experience.

"In retail they call it customer service, in health care I'm going to call it patient care services. We really need to maximize a patient's experience," said Glazer, who put the call center next to his office. "They're sick when they call us and the last thing they need to be dealing with is the hassles of how do I make an appointment? How do I get to the right person?"

Successful drugs and therapies are behind expansions at Acorda Therapeutics and Regeneron.

Acorda moved into space at 420 Saw Mill River Road in 2012 and intends to occupy 25,500 square feet at 440 Saw Mill River Road. The $6 million expansion is expected to create 90 permanent jobs, thanks to Acorda's success with its drug Ampyra, said spokesman Jeff McDonald.

In November Regeneron Pharmaceuticals broke ground in Mount Pleasant on a $100 million expansion that will create two new buildings and 400 new permanent jobs. Net product sales of its drug EYLEA in the United States grew 79 percent to $1 billion in the first nine months of 2013, compared with the same period in 2012.

Receiving health care in the Lower Hudson Valley will be a very different experience in five or 10 years, predicted Simone Healthcare Development's Leibler.

"I think that every hospital in Westchester in 10 years' time will be part of a larger hospital system. There will be no individual hospitals," said Leibler. "We will see all these systems offer ambulatory care outside hospitals in new, modern, efficient buildings, which I hope will offer excellent care to patients at a price that is affordable."

Montefiore and White Plains Hospital are already moving in the direction envisioned by Leibler by opening satellites. In September White Plains Hospital opened an 18,000-square-foot practice and imaging center at the Wykagyl Shopping Center in New Rochelle.

White Plains Hospital president Susan Fox said that the hospital's move into New Rochelle was intended to provide access to the hospital's "expanding breadth of outpatient specialty services and growing physician base."

Twitter: @Ernie_G_journo

Health sector real estate activity

Ardsley: Acorda intends to occupy 25,500 square feet at 440 Saw Mill River Road. The $6 million expansion is expected to create 90 permanent jobs.

Jefferson Valley: Mount Kisco Medical Group will occupy a 18,000-square-foot facility in the summer.

Mount Pleasant: In November Regeneron Pharmaceuticals broke ground on a $100 million expansion that will create two new buildings and 400 new permanent jobs.

New Rochelle: In September ENT and Allergy Associates will move into new offices at 145 Huguenot St. with 8,161 square feet of space.

Nyack and Pearl River: Crystal Run Healthcare expects to open two practice sites offering primary care and medical sub-specialities as part of an expansion plan in Rockland County.

Purchase: Simone Healthcare Real Estate is building a $22 million, 85,000-square-foot building at 3030 Westchester Ave. for the WESTMED Medical Group.

Rye Brook: In March the Benedict Realty Group in Great Neck, N.Y., bought 90 South Ridge St. The developer intends to market it as a medical arts complex.

Tarrytown: In 2012 Montefiore purchased the 300,000-square-foot former Kraft building on Route 9 for its computer and office staff.