Othership bills itself as a “social bathhouse” and will offer ice baths, saunas and other wellness services when it opens in late 2024 or early 2025, according to the landlord.

Rubenstein Partners did not disclose the asking rent in the deal, but the average asking retail rents in the area of North Brooklyn was about $164 per square foot in the second quarter of 2023, according to a report from the Real Estate Board of New York.

“As the needs within our community are ever evolving, we continuously strive to curate a creative tenant base to best serve those growing needs, with the addition of Othership providing a vital outlet of emotional wellness to Williamsburg,” Elyssa Marcus of Rubenstein Partners said in a statement. “We look forward to serving as Othership’s first Brooklyn operation as we continue evolving the dynamic ecosystem of businesses at the building.”

Newmark (NMRK)’s Neal Ohm, Caleb Petersen and Michael Cohen represented Rubenstein in the deal while CBRE (CBRE)’s Cassie Durand and Aylin Gucalp negotiated on behalf of the tenant. Newmark and CBRE did not immediately respond to a request for comment.

Othership opened in Toronto in 2022 and secured $8 million in Series A funding earlier this year, with plans to open 20 locations around North America in the next five years, according to Fitt Insider.

Its new eight-story Brooklyn home was completed in 2019 and sits between Wythe and Kent avenues and North 12th and North 13th streets and was designed by Hollwich Kushner of HWKN Architecture and Gensler.

The 500,000-square-foot development was built in a joint venture with Heritage Equity Partners.

Mark Hallum can be reached at mhallum@commercialobserver.com.

BentallGreenOak, which recently decided to go by the initials BGO, is no exception. BGO is a Miami-based, privately held global investment fund with interests in all four traditional commercial real estate food groups: office, multifamily, retail and industrial. 

It has spent the better part of a year creating a model at its offices at Manhattan’s 685 Third Avenue, near Grand Central Terminal. What started out as the company’s “office of the future” is now being called its MIRO (move-in ready offices) to help the landlord commune with tenants to create offices that are ready to work for them from day one.

The aim, the company says, is to deliver pre-builts that are “tech- and hybrid-enabled, emphasizing human-centric design to encourage adaptability, wellness and collaboration.” Suites range from 1,000 to 18,000 square feet. Tenants also share access to what BGO is calling “amenity centers” that would include town hall space and various perks such as a wellness center and food options. Lease lengths depend on tenant needs, BGO says. 

BGO has just started to roll out MIRO, and Rob Naso, a BGO managing partner and head of its asset management, shared early details exclusively with Commercial Observer during an interview in mid-August. The “representative sample” (BGO’s words) in 685 Third is being replicated in office buildings in San Francisco, Boston, Chicago and Washington, D.C., with plans under way in other cities as well.  

Naso  said the company has about 14 million to 15 million square feet of offices nationwide. That’s down from between 17 million and 18 million square feet, which makes it a medium-size office landlord. For example, SL Green Realty has about 33 million square feet of buildings, almost all in the New York area, and some 28.8 million just in Manhattan. Almost all are office buildings.

BGO is spread across 14 countries, including the U.S., Canada and the U.K. In an Aug. 15 story, the Wall Street Journal named BGO, along with Cohen & Steers and Goldman Sachs, as among prominent firms raising billions to target assets distressed by the recession, the rise in interest rates, and the post-pandemic climate.

This interview has been edited for length and clarity. 

Commercial Observer: Why did BGO do this, make these models for its tenants?

Rob Naso: The office market has been incredibly competitive coming out of COVID. We were kind of looking at what would differentiate us relative to other landlords. And I think we kind of came to the same conclusion that really nice space — functional design, aesthetically appealing, very well done — would enable us to kind of present that as an alternative to an active tenant discussion that we continue to have not only with existing tenants as they think through what they’re going to do upon renewal, but then with our brokers and new tenant candidates that want to come in and look at what options are available.

I think we really concluded that if we could come up with something that was functional and modular and could work, then we could replicate that across the country in a very efficient manner, which would then ultimately become cost effective — versus having to redo this at every single building we have in every different market. 

It was during a panel at NYU’s Women in Commercial Real Estate conference last October that I first heard Mariana Circiumaru, head of BGO’s U.S. construction, value-add portfolio and capex projects, mention this as the “office of the future.” Are you still using that idea?

What I would tell you is, we think the office of tomorrow, and today is very different from what the office of yesterday was.

So, I think, again, if you look at kind of where we are today, and you probably think back at that conference, again, that was probably an early version of what we’re talking about. We’ve evolved and kind of taken that to a move-in-ready office designation now, which we think is a much better representation of what we’re doing and how we’re doing it for tenants that need and want space today.

But is it a struggle, the filling up of space? Is it significantly harder now than it was pre-COVID?

I’d say it’s different, and it’s very competitive. Pre-COVID, you probably have a lot more visibility on the demand side. Going through a tough economic climate — interest rates rising, operating costs rising for tenants — is not really helpful.

But I think what we’ve gotten to now is a position where we are actively engaged, not only with our landlord broker, but the tenant agency market in terms of who’s out covering tenants. I think for us to get successful and be successful, we think we need to deliver a premium product at a market price. We think we’re getting to that point in terms of the functional and the aesthetic.

That stuff today is what we can control. And we think we’re delivering what tenants want. Again, the tenant dialogue is very active. And it’s not only with new tenants, it’s with existing tenants.

I think that coming out of COVID a lot of tenants still don’t definitively know exactly what space they’re going to need, and how they’re going to use it. This is one of the evolutionary things we will see over the next couple of years. I think you talk to senior managers, and a lot of people want to be back in the office, but they also understand that hybrid is still going to be a component of that. So, I think, to the extent you can deliver a space that is functional and movable, then that should put you in a very good place to at least be competitive.

Chelsea Marrin for Commercial Ob

Are companies looking to get a windfall out of leasing significantly less office, or are they looking to have the same amount, even though it might not be as fully occupied or fully engaged?
It goes both ways. There are some tenants that say, “Look, we don’t think we’re going to need as much space, but we want space and we are happy to commit to a five- or 10-year lease.”

I think some tenants are looking at consolidation opportunities, where they might have had multiple offices across different buildings and they want to consolidate there.

You have to bifurcate because I think the trophy and the really high-end products are generating premium rents. Everybody else is competing. So I think you have to be as commercial and as creative as you can, and some of that is understanding what tenants want, and whether or not they need fiscal relief this year. So I think it’s not only the aesthetic and the design of what we’re doing, it’s the act of dialogue with a tenant to understand what they need, what they’re looking for.

We have the ability to make our team available to prospective tenants, and even if they’re on the small side, I think this has been very well received. I’m not sure you would have typically gotten that from bigger landlords where a small tenant is a small fish in a big pond.

Is there an underlying philosophy as to what office is going to be like going forward? Is there a sense that you can’t do business like you did business before?

Again, we think office is going to be competitive. This whole movement toward move-in-ready is something that we think is going to set us apart.

It’s not just spec built. It’s making sure that in every building that we have across the country that we have space ready to go. Beforehand, we might have just waited to see what tenant demand was going to be like. I think here understanding that you’re in a very competitive marketplace, you have to be ready, you have to be ready to go right away. We’re trying to do that nationally.

At the same time, is BGO trying to reduce the number of office buildings it has? Is it trying to reduce its exposure?
The capital markets today are a bit tough. We come from a position where we’ve done a lot of the work in the buildings. All of the amenitization work, the construction work, is all behind us in most cases. The reality is today’s marketplace is not liquid for everything other than maybe trophy office. 

I think we’re really just focused on blocking and tackling, and making sure that we take care of all of the tenants that we have, and that we are as commercial as can be on any new tenant prospects that are out there. But, no, I mean, we’re not looking at selling office at fire-sale prices, or anything like that.

If liquidity presents itself for office, we would entertain that. But we are, in no cases, just looking to exit outright.

Chelsea Marrin for Commercial Ob

What do you think the future office has that the past office didn’t?

I think there’s a lot more focus on the tenant and their employees. It was a very difficult COVID period. I think we learned very quickly to manage through an empathetic lens, not only with the tenants and the counterparties that we had to negotiate with during very tough, difficult economic times, but also managing our own staff. Starting remote during COVID, in the early days, and then starting to bring back senior management into the office, and then ultimately bringing back everybody else.

There’s more focus today on the employee than I think there ever was, whether that’s mental health, health and wellness, amenities, all those types of things. A lot of people say you’re competing with their living room. I mean, that’s a huge focus today — we didn’t have to think about that beforehand.

So it’s a much more holistic discussion today with many more touch points, trying to make sure that we can deliver what attendees are going to want.

Have you figured out how much all this attention to space users’ needs is going to cost?

I don’t know if we’ve calculated where this total cost is going to be. What I tell you is, again, I think we take a very micro look at every office building that we have to understand what it needs to be competitive in the market that it’s in. And, every market is different, whether it’s Seattle or New York, or Chicago or Denver, whatever it is.

We want a sense that when you walk into a building, it looks great, not only from an amenity perspective, but it’s clean, it’s efficient, we’ve taken care of many issues outside the door. So making sure that the corridors are well done, bathrooms are upgraded, the pre-builts are all ready to roll and ready to move in. I think we’re in relatively good shape across the board on a lot of what we’re doing.

BentallGreenOak, which recently decided to go by the initials BGO, is no exception. BGO is a Miami-based, privately held global investment fund with interests in all four traditional commercial real estate food groups: office, multifamily, retail and industrial. 

It has spent the better part of a year creating a model at its offices at Manhattan’s 685 Third Avenue, near Grand Central Terminal. What started out as the company’s “office of the future” is now being called its MIRO (move-in ready offices) to help the landlord commune with tenants to create offices that are ready to work for them from day one.

The aim, the company says, is to deliver pre-builts that are “tech- and hybrid-enabled, emphasizing human-centric design to encourage adaptability, wellness and collaboration.” Suites range from 1,000 to 18,000 square feet. Tenants also share access to what BGO is calling “amenity centers” that would include town hall space and various perks such as a wellness center and food options. Lease lengths depend on tenant needs, BGO says. 

BGO has just started to roll out MIRO, and Rob Naso, a BGO managing partner and head of its asset management, shared early details exclusively with Commercial Observer during an interview in mid-August. The “representative sample” (BGO’s words) in 685 Third is being replicated in office buildings in San Francisco, Boston, Chicago and Washington, D.C., with plans under way in other cities as well.  

Naso  said the company has about 14 million to 15 million square feet of offices nationwide. That’s down from between 17 million and 18 million square feet, which makes it a medium-size office landlord. For example, SL Green Realty has about 33 million square feet of buildings, almost all in the New York area, and some 28.8 million just in Manhattan. Almost all are office buildings.

BGO is spread across 14 countries, including the U.S., Canada and the U.K. In an Aug. 15 story, the Wall Street Journal named BGO, along with Cohen & Steers and Goldman Sachs, as among prominent firms raising billions to target assets distressed by the recession, the rise in interest rates, and the post-pandemic climate.

This interview has been edited for length and clarity. 

Commercial Observer: Why did BGO do this, make these models for its tenants?

Rob Naso: The office market has been incredibly competitive coming out of COVID. We were kind of looking at what would differentiate us relative to other landlords. And I think we kind of came to the same conclusion that really nice space — functional design, aesthetically appealing, very well done — would enable us to kind of present that as an alternative to an active tenant discussion that we continue to have not only with existing tenants as they think through what they’re going to do upon renewal, but then with our brokers and new tenant candidates that want to come in and look at what options are available.

I think we really concluded that if we could come up with something that was functional and modular and could work, then we could replicate that across the country in a very efficient manner, which would then ultimately become cost effective — versus having to redo this at every single building we have in every different market. 

It was during a panel at NYU’s Women in Commercial Real Estate conference last October that I first heard Mariana Circiumaru, head of BGO’s U.S. construction, value-add portfolio and capex projects, mention this as the “office of the future.” Are you still using that idea?

What I would tell you is, we think the office of tomorrow, and today is very different from what the office of yesterday was.

So, I think, again, if you look at kind of where we are today, and you probably think back at that conference, again, that was probably an early version of what we’re talking about. We’ve evolved and kind of taken that to a move-in-ready office designation now, which we think is a much better representation of what we’re doing and how we’re doing it for tenants that need and want space today.

But is it a struggle, the filling up of space? Is it significantly harder now than it was pre-COVID?

I’d say it’s different, and it’s very competitive. Pre-COVID, you probably have a lot more visibility on the demand side. Going through a tough economic climate — interest rates rising, operating costs rising for tenants — is not really helpful.

But I think what we’ve gotten to now is a position where we are actively engaged, not only with our landlord broker, but the tenant agency market in terms of who’s out covering tenants. I think for us to get successful and be successful, we think we need to deliver a premium product at a market price. We think we’re getting to that point in terms of the functional and the aesthetic.

That stuff today is what we can control. And we think we’re delivering what tenants want. Again, the tenant dialogue is very active. And it’s not only with new tenants, it’s with existing tenants.

I think that coming out of COVID a lot of tenants still don’t definitively know exactly what space they’re going to need, and how they’re going to use it. This is one of the evolutionary things we will see over the next couple of years. I think you talk to senior managers, and a lot of people want to be back in the office, but they also understand that hybrid is still going to be a component of that. So, I think, to the extent you can deliver a space that is functional and movable, then that should put you in a very good place to at least be competitive.

Chelsea Marrin for Commercial Ob

Are companies looking to get a windfall out of leasing significantly less office, or are they looking to have the same amount, even though it might not be as fully occupied or fully engaged?
It goes both ways. There are some tenants that say, “Look, we don’t think we’re going to need as much space, but we want space and we are happy to commit to a five- or 10-year lease.”

I think some tenants are looking at consolidation opportunities, where they might have had multiple offices across different buildings and they want to consolidate there.

You have to bifurcate because I think the trophy and the really high-end products are generating premium rents. Everybody else is competing. So I think you have to be as commercial and as creative as you can, and some of that is understanding what tenants want, and whether or not they need fiscal relief this year. So I think it’s not only the aesthetic and the design of what we’re doing, it’s the act of dialogue with a tenant to understand what they need, what they’re looking for.

We have the ability to make our team available to prospective tenants, and even if they’re on the small side, I think this has been very well received. I’m not sure you would have typically gotten that from bigger landlords where a small tenant is a small fish in a big pond.

Is there an underlying philosophy as to what office is going to be like going forward? Is there a sense that you can’t do business like you did business before?

Again, we think office is going to be competitive. This whole movement toward move-in-ready is something that we think is going to set us apart.

It’s not just spec built. It’s making sure that in every building that we have across the country that we have space ready to go. Beforehand, we might have just waited to see what tenant demand was going to be like. I think here understanding that you’re in a very competitive marketplace, you have to be ready, you have to be ready to go right away. We’re trying to do that nationally.

At the same time, is BGO trying to reduce the number of office buildings it has? Is it trying to reduce its exposure?
The capital markets today are a bit tough. We come from a position where we’ve done a lot of the work in the buildings. All of the amenitization work, the construction work, is all behind us in most cases. The reality is today’s marketplace is not liquid for everything other than maybe trophy office. 

I think we’re really just focused on blocking and tackling, and making sure that we take care of all of the tenants that we have, and that we are as commercial as can be on any new tenant prospects that are out there. But, no, I mean, we’re not looking at selling office at fire-sale prices, or anything like that.

If liquidity presents itself for office, we would entertain that. But we are, in no cases, just looking to exit outright.

Chelsea Marrin for Commercial Ob

What do you think the future office has that the past office didn’t?

I think there’s a lot more focus on the tenant and their employees. It was a very difficult COVID period. I think we learned very quickly to manage through an empathetic lens, not only with the tenants and the counterparties that we had to negotiate with during very tough, difficult economic times, but also managing our own staff. Starting remote during COVID, in the early days, and then starting to bring back senior management into the office, and then ultimately bringing back everybody else.

There’s more focus today on the employee than I think there ever was, whether that’s mental health, health and wellness, amenities, all those types of things. A lot of people say you’re competing with their living room. I mean, that’s a huge focus today — we didn’t have to think about that beforehand.

So it’s a much more holistic discussion today with many more touch points, trying to make sure that we can deliver what attendees are going to want.

Have you figured out how much all this attention to space users’ needs is going to cost?

I don’t know if we’ve calculated where this total cost is going to be. What I tell you is, again, I think we take a very micro look at every office building that we have to understand what it needs to be competitive in the market that it’s in. And, every market is different, whether it’s Seattle or New York, or Chicago or Denver, whatever it is.

We want a sense that when you walk into a building, it looks great, not only from an amenity perspective, but it’s clean, it’s efficient, we’ve taken care of many issues outside the door. So making sure that the corridors are well done, bathrooms are upgraded, the pre-builts are all ready to roll and ready to move in. I think we’re in relatively good shape across the board on a lot of what we’re doing.

One of these in New York was NYU Langone Health. Others might include Northwell Health, Montefiore Einstein and New York Presbyterian. Over in New Jersey, you got Hackensack Meridian and RWJ (Robert Wood Johnson, he of Johnson & Johnson) Barnabas. 

Around the nation, you got Kaiser Permanente and California-based Cedars Sinai. And the role models, the Mayo Clinic and the Cleveland Clinic, continue to thrive. Memorial Sloan Kettering Cancer Center, famous for its cancer care, is no longer just a monolith on Manhattan’s York Avenue. Its treatment centers can be found in 15 places in Manhattan, mostly on the East Side but also in East Harlem; Brooklyn; West Harrison, N.Y.; Uniondale, N.Y.; Commack, N.Y.; and three places in New Jersey, per its website.

Of course, in the United States, there is the neverending debate over whether our privately based health system provides the greatest care at the most affordable cost, compared to the government-dominated systems elsewhere in the world. 

This is not one of those stories. It is only about how NYU Langone became a dominant force in New York City, and whether it is done growing, or will its footprint continue to grow.

“Economic efficiency led to consolidation to create hospital systems,” said Tim Savage, faculty co-director of NYU’s School of Professional Studies’ applied analytics lab and a faculty member at its Schack Institute of Real Estate, who called hospital systems “insulated” from remote work.

Looking specifically at NYU Langone, the nonprofit consists of some 600 locations throughout the tri-state area, including Tisch Hospital, the Kimmel Pavilion, an orthopedic hospital near Stuyvesant Town, the Perlmutter Cancer Center, hospitals in Brooklyn and Mineola, N.Y., and two medical schools, one of which, the Grossman, boasts Jonas Salk and Albert Sabin, pioneers in the development of polio vaccines, as graduates. And that just scratches the surface and begs the question of where it might go next.

Vicki Match Suna, NYU Langone’s executive vice president and vice dean for real estate development and facilities, spoke by phone in August to answer questions about how hospital systems and specifically NYU Langone fit into the region’s commercial real estate universe. 

The interview has been edited for length and clarity.

Commercial Observer: First of all, please tell me a COVID story. I figure you were in the middle of all of that.
Vicki Match Suna: Yes, of course, I was in the middle. We were all in the middle.

That was a very intense period. As you might know, our inpatient beds are distributed across the campus. We have a new building, called the Kimmel Pavilion, that is built to the most up-to-date standards, and that allowed us to accommodate all of the COVID patients with the appropriate air pressure. And we quickly converted that entire building to a COVID facility.

And, then, of course, we needed additional beds. So we had to adapt our other inpatient facilities to also accommodate COVID patients, and create the negative pressure rooms that were necessary. So it was a very busy and intense period of time.

There were also many other considerations, like housing for employees. We had to very quickly repurpose many of our facilities to create emergency housing, so employees could stay here overnight. And it was an interesting period of time in both our emergency room, as you can imagine, as well as our inpatient facilities.

I’m kind of picturing some meetings involving the entire city medical establishment, just trying to steer the whole response to the pandemic. Were there meetings like that, and were they very intense meetings?
Well, there were lots of conversations with different ministers in the city. Everyone was looking to try to help us manage through that difficult period.

What benefit do New Yorkers get out of having NYU Langone be a hospital system that they wouldn’t get if these were just individual hospitals?
NYU Langone is a full academic and medical health system. As you probably know, we have a number of hospitals, but we also have two medical schools; we do a tremendous amount of research; and we take a very much integrated approach to all of these areas.

So the collaboration that exists between our three mission areas — research, education and clinical care — is really an important differentiator that helps us provide the best possible care for our patients. And, through our research, we’re able to really make significant advancements in biomedical research that eventually leads to cures and improved patient care.

Being spread out across the New York metropolitan region enables us to provide care for our patients close to where they live.

Yè Fan/for Commercial Observer

The press did such a good job covering mergers and acquisitions one by one that it may have missed the big picture story, which is that individual hospitals had by and large been replaced by hospital systems. How do you explain what happened, and why we are seeing hospital systems growing and fewer stand-alone hospitals?
I think the care environment has gotten more and more complex over the years. The larger systems bring a lot more resources to bear on many factors. Smaller stand-alone hospitals have struggled, and really need the backing of a larger system, or infusions of capital. It’s extremely expensive to maintain hospitals, but to bring them up to quality and the equipment that’s required to give the care that is now available to many — these are very expensive endeavors and they are difficult for a stand-alone hospital to support.

What are NYU Langone’s growth prospects going forward? Do you remain in growth mode, or are you going to now stop and consolidate what you have?
We continue to be in growth mode. We have experienced a tremendous amount of growth in recent years. But we don’t see that really stopping. We are going to be doing more. We have a number of major sites that we are expanding into right now. But we are opportunistic in terms of identifying future sites. When things become available, if they make sense for us, we will pursue them.

With the difficulties that office landlords have been having, does that represent a growth opportunity for yours and other hospital systems?
Yes, we definitely think it does. There have been a number of opportunities that have come to our attention recently, some of which we have pursued and we are moving forward with. We have a need for office space at the moment. Although office space can be converted into clinical practice space, and these opportunities are definitely out there.

We’re in the process of purchasing a residential building that became available recently. That’s 577 First Avenue, which is across the street from our campus. That’s become a great opportunity for us, given this location, and our needs always include a need for housing. There are also other opportunities out on Long Island that we are pursuing right now.

Do you see the growth of yourselves, Einstein, New York Presbyterian, Northwell — do you see them becoming core institutions of the city, the way financing and banking have been? Anchor institutions?
One thing I should point out is one of the distinguishing features in health care systems is that we are an academic medical center. So we are not only a hospital, but we also have a medical school and a robust research program. And, given some of the recent shifts, maybe there’s a little bit more focus on health care opportunities. As you probably know, life sciences is also a key focus for the real estate market at the moment, and an area in which we’re also very active.

Can you cite for me at least one example of how you might have converted a facility into one that worked for you guys?
We aim to be an enriching environment for our patients. We look to translate the NYU Langone vision for excellence into physical reality.

We have many examples of this. We take buildings, retail facilities, many different kinds of buildings and convert them into facilities, patient care, and for research. So, for this property, on 222 East 41st Street, — we took a long-term net lease on the property. It was an office building, and we converted it entirely into a patient care, ambulatory care facility. [It opened for NYU Langone in phases, beginning in 2018.]

We also converted two former Verizon buildings. We created co-ops or condominiums in those buildings, and we have converted those facilities into patient care. We have a new women’s center that we just recently opened in the former Citigroup Building on 53rd Street.

With these, we really focus on the patient experience. We’re very much about creating environments that optimize natural light, with art incorporated into all of our facilities. We have a very robust art program, with permission pieces for many of our major facilities and we also purchase pieces. But all of the art is meaningful and connects to the facility and its overall purpose. 

We focus on intuitive wayfinding. We understand that when patients and visitors come to our facilities, they’re large and confusing. It’s very important to provide clues for them and ways that they can find their way around these facilities.

I imagine you are aware of Local Law 97, which is designed to make buildings more energy efficient and reduce their carbon footprints. With medical facilities being ample users of energy, are you going to have a problem with that?
We are completely dedicated to sustainability and reducing greenhouse gasses from our campus and facilities and to fundamentally help create a more sustainable and resilient city. 

However, there’s really no more complex building type than hospitals and health care facilities and research facilities. We have 24/7 operations, and a tremendous amount of energy is used by these facilities. We are heavily regulated by government. There are a lot of codes and regulations that we have to comply with. So Local Law 97 is a bit of a challenge for us and other health care facilities.

We’ve worked very hard with many of the regulatory bodies to address our concerns and get some appropriate accommodations for our uses. That I think we are the only facility that has actually been able to take advantage of the alternate compliance method, that will significantly help us in terms of reducing the costs to NYU Langone. It remains a significant initiative and will eventually result in penalties over the period of time from now to 2030.

I also just want to note that we generally have a very robust sustainability program. Actually, we’re leaders in this area in the New York region. We’re very proud of the work that we’ve done.

One of these in New York was NYU Langone Health. Others might include Northwell Health, Montefiore Einstein and New York Presbyterian. Over in New Jersey, you got Hackensack Meridian and RWJ (Robert Wood Johnson, he of Johnson & Johnson) Barnabas. 

Around the nation, you got Kaiser Permanente and California-based Cedars Sinai. And the role models, the Mayo Clinic and the Cleveland Clinic, continue to thrive. Memorial Sloan Kettering Cancer Center, famous for its cancer care, is no longer just a monolith on Manhattan’s York Avenue. Its treatment centers can be found in 15 places in Manhattan, mostly on the East Side but also in East Harlem; Brooklyn; West Harrison, N.Y.; Uniondale, N.Y.; Commack, N.Y.; and three places in New Jersey, per its website.

Of course, in the United States, there is the neverending debate over whether our privately based health system provides the greatest care at the most affordable cost, compared to the government-dominated systems elsewhere in the world. 

This is not one of those stories. It is only about how NYU Langone became a dominant force in New York City, and whether it is done growing, or will its footprint continue to grow.

“Economic efficiency led to consolidation to create hospital systems,” said Tim Savage, faculty co-director of NYU’s School of Professional Studies’ applied analytics lab and a faculty member at its Schack Institute of Real Estate, who called hospital systems “insulated” from remote work.

Looking specifically at NYU Langone, the nonprofit consists of some 600 locations throughout the tri-state area, including Tisch Hospital, the Kimmel Pavilion, an orthopedic hospital near Stuyvesant Town, the Perlmutter Cancer Center, hospitals in Brooklyn and Mineola, N.Y., and two medical schools, one of which, the Grossman, boasts Jonas Salk and Albert Sabin, pioneers in the development of polio vaccines, as graduates. And that just scratches the surface and begs the question of where it might go next.

Vicki Match Suna, NYU Langone’s executive vice president and vice dean for real estate development and facilities, spoke by phone in August to answer questions about how hospital systems and specifically NYU Langone fit into the region’s commercial real estate universe. 

The interview has been edited for length and clarity.

Commercial Observer: First of all, please tell me a COVID story. I figure you were in the middle of all of that.
Vicki Match Suna: Yes, of course, I was in the middle. We were all in the middle.

That was a very intense period. As you might know, our inpatient beds are distributed across the campus. We have a new building, called the Kimmel Pavilion, that is built to the most up-to-date standards, and that allowed us to accommodate all of the COVID patients with the appropriate air pressure. And we quickly converted that entire building to a COVID facility.

And, then, of course, we needed additional beds. So we had to adapt our other inpatient facilities to also accommodate COVID patients, and create the negative pressure rooms that were necessary. So it was a very busy and intense period of time.

There were also many other considerations, like housing for employees. We had to very quickly repurpose many of our facilities to create emergency housing, so employees could stay here overnight. And it was an interesting period of time in both our emergency room, as you can imagine, as well as our inpatient facilities.

I’m kind of picturing some meetings involving the entire city medical establishment, just trying to steer the whole response to the pandemic. Were there meetings like that, and were they very intense meetings?
Well, there were lots of conversations with different ministers in the city. Everyone was looking to try to help us manage through that difficult period.

What benefit do New Yorkers get out of having NYU Langone be a hospital system that they wouldn’t get if these were just individual hospitals?
NYU Langone is a full academic and medical health system. As you probably know, we have a number of hospitals, but we also have two medical schools; we do a tremendous amount of research; and we take a very much integrated approach to all of these areas.

So the collaboration that exists between our three mission areas — research, education and clinical care — is really an important differentiator that helps us provide the best possible care for our patients. And, through our research, we’re able to really make significant advancements in biomedical research that eventually leads to cures and improved patient care.

Being spread out across the New York metropolitan region enables us to provide care for our patients close to where they live.

Yè Fan/for Commercial Observer

The press did such a good job covering mergers and acquisitions one by one that it may have missed the big picture story, which is that individual hospitals had by and large been replaced by hospital systems. How do you explain what happened, and why we are seeing hospital systems growing and fewer stand-alone hospitals?
I think the care environment has gotten more and more complex over the years. The larger systems bring a lot more resources to bear on many factors. Smaller stand-alone hospitals have struggled, and really need the backing of a larger system, or infusions of capital. It’s extremely expensive to maintain hospitals, but to bring them up to quality and the equipment that’s required to give the care that is now available to many — these are very expensive endeavors and they are difficult for a stand-alone hospital to support.

What are NYU Langone’s growth prospects going forward? Do you remain in growth mode, or are you going to now stop and consolidate what you have?
We continue to be in growth mode. We have experienced a tremendous amount of growth in recent years. But we don’t see that really stopping. We are going to be doing more. We have a number of major sites that we are expanding into right now. But we are opportunistic in terms of identifying future sites. When things become available, if they make sense for us, we will pursue them.

With the difficulties that office landlords have been having, does that represent a growth opportunity for yours and other hospital systems?
Yes, we definitely think it does. There have been a number of opportunities that have come to our attention recently, some of which we have pursued and we are moving forward with. We have a need for office space at the moment. Although office space can be converted into clinical practice space, and these opportunities are definitely out there.

We’re in the process of purchasing a residential building that became available recently. That’s 577 First Avenue, which is across the street from our campus. That’s become a great opportunity for us, given this location, and our needs always include a need for housing. There are also other opportunities out on Long Island that we are pursuing right now.

Do you see the growth of yourselves, Einstein, New York Presbyterian, Northwell — do you see them becoming core institutions of the city, the way financing and banking have been? Anchor institutions?
One thing I should point out is one of the distinguishing features in health care systems is that we are an academic medical center. So we are not only a hospital, but we also have a medical school and a robust research program. And, given some of the recent shifts, maybe there’s a little bit more focus on health care opportunities. As you probably know, life sciences is also a key focus for the real estate market at the moment, and an area in which we’re also very active.

Can you cite for me at least one example of how you might have converted a facility into one that worked for you guys?
We aim to be an enriching environment for our patients. We look to translate the NYU Langone vision for excellence into physical reality.

We have many examples of this. We take buildings, retail facilities, many different kinds of buildings and convert them into facilities, patient care, and for research. So, for this property, on 222 East 41st Street, — we took a long-term net lease on the property. It was an office building, and we converted it entirely into a patient care, ambulatory care facility. [It opened for NYU Langone in phases, beginning in 2018.]

We also converted two former Verizon buildings. We created co-ops or condominiums in those buildings, and we have converted those facilities into patient care. We have a new women’s center that we just recently opened in the former Citigroup Building on 53rd Street.

With these, we really focus on the patient experience. We’re very much about creating environments that optimize natural light, with art incorporated into all of our facilities. We have a very robust art program, with permission pieces for many of our major facilities and we also purchase pieces. But all of the art is meaningful and connects to the facility and its overall purpose. 

We focus on intuitive wayfinding. We understand that when patients and visitors come to our facilities, they’re large and confusing. It’s very important to provide clues for them and ways that they can find their way around these facilities.

I imagine you are aware of Local Law 97, which is designed to make buildings more energy efficient and reduce their carbon footprints. With medical facilities being ample users of energy, are you going to have a problem with that?
We are completely dedicated to sustainability and reducing greenhouse gasses from our campus and facilities and to fundamentally help create a more sustainable and resilient city. 

However, there’s really no more complex building type than hospitals and health care facilities and research facilities. We have 24/7 operations, and a tremendous amount of energy is used by these facilities. We are heavily regulated by government. There are a lot of codes and regulations that we have to comply with. So Local Law 97 is a bit of a challenge for us and other health care facilities.

We’ve worked very hard with many of the regulatory bodies to address our concerns and get some appropriate accommodations for our uses. That I think we are the only facility that has actually been able to take advantage of the alternate compliance method, that will significantly help us in terms of reducing the costs to NYU Langone. It remains a significant initiative and will eventually result in penalties over the period of time from now to 2030.

I also just want to note that we generally have a very robust sustainability program. Actually, we’re leaders in this area in the New York region. We’re very proud of the work that we’ve done.

Two areas of in-person sports attendance that have attracted proptech innovation focus on easing access to sports venues and enhancing amenities, bringing fans light-years beyond the old-school standards of ticket-taking, turnstiles, and a hot dog and a beer.

One proptech startup addressing seamless but secure access to sporting events is Wicket Software, a computer vision technology for ticketing, access control, frictionless payment and credentialing.

Founded in 2020, the Cambridge, Mass.-based company uses facial recognition authentication to replace the physical and digital ticketing process, said Jeff Boehm, chief marketing officer at Wicket.

“At its core, it is a computer vision algorithm that in less than a second can identify or match somebody’s face to a previously submitted selfie or picture of yourself,” said Boehm. “A series of integrations allows us to then identify who that person is in relation to ticketing accounts like Ticketmaster, or credentialing accounts for access control that connect to security gates and other hardware systems used to unlock or open doors, or let people into secure areas. It has very broad applicability.

“Sports and stadiums are by far our biggest market, but we’re also used in other live events in corporate facilities in a variety of industries.”

Wicket’s 30-person workforce is focusing on research and development right now as it continues to build out its technology, said Boehm. However, as early as the COVID pandemic in 2020, the startup snared the NFL’s Cleveland Browns as its first customer, he said.

“People were starting to be allowed back into stadiums in 2020 and [the Browns] sought a solution that could get fans into the stadium while keeping face masks on [and] while minimizing touch and interaction,” Boehm said. “We were able to prove out our technology so that people -— even with face masks on — didn’t have to pull out their phones, didn’t have to touch anything, didn’t have to pass a physical ticket, and could get into the stadium safely.”

Since then, Wicket has added the practice facility and corporate offices of Major League Soccer’s Columbus Crew, the Atlanta Falcons’ Mercedes Benz Stadium, and the New York Mets’ Citi Field to its client roster of about a dozen stadiums, said Boehm.

Wicket’s use is generally free to fans, as the company’s software as a service costs are paid by the teams who are its customers, he said.

“Teams can do whatever they want,” said Boehm. “If they want to charge for this as a premium experience, they could do that. As of now, I haven’t seen any teams charging for it. We’ve actually had a few teams be able to sign up sponsors because of it. A great example is at Mercedes Benz stadium, where fans love using this and it gets them into the stadium faster.

“The stadium actually signed a major partnership with Delta Airlines and called it the Delta Fly-Through Lanes. Other stadiums have done the same thing, including the Cleveland Browns’ stadium.”

Another proptech company that sports arenas and stadiums have used since its inception in 2011 is Manhattan-based SocialSign.in, which leverages its guest Wi-Fi technology to learn about visitors and build relationships with potential customers.

“We are a later-stage startup that enables sports stadiums to transform the amenity of fan-facing guest Wi-Fi into a first-party marketing, ad and sponsorship channel, turning an operating expense into a revenue-generating asset,” said Mike Perrone, CEO at SocialSign.in.

The company helps stadiums personalize their Wi-Fi interactions, deal with regulatory requirements around privacy and consent, and more effectively monetize audience channels, said Perrone. 

SocialSign.in has clients in all U.S.-based professional leagues, as well as some foreign leagues and collegiate sports. These include soccer’s Premier League, the Golden State Warriors, the Buffalo Bills, Liverpool FC, the Miami Marlins, the Edmonton Oilers, Inter-Miami FC, and the University of Southern California.

Another proptech startup, SOS, is addressing fans’ more personal needs, said Susanna Twarog, co-CEO and co-founder at the 3-year-old, Boston-based SOS.

“We are hyper-focused on delivering products and an experience across health, wellness and beauty categories,” Twarog said. “So products like face wipes, deodorant, sunscreen, chapstick, hair ties — and, very importantly, free period care — in every machine location.”

Providing wall-mounted cashless smart vending machines for its customers, the company has been in sports venues such as the Red Sox’s Fenway Park since 2021, and expects that such facilities will be an increasing percentage of its business in the near future, said Twarog.

SOS also has its machines in the NFL’s Jacksonville Jaguars’ TIAA Bank Field, and NHL arenas such as the Florida Panthers’ FLA Live Arena in Sunrise, Fla.

“We fit into the proptech vision and ecosystem in that we’re delivering an experience and an enhancement for managers and the facilities side of the business, while also driving new commercial opportunities within that organization,” said Twarog. “We are also a channel and have a product that is tech-enabled, collecting and capturing a tremendous amount of valuable data for the brands that we work with.”

Aunt Flow is another proptech startup addressing women’s personal needs in stadiums and arenas. Founded in 2016 and backed by JLL Spark Ventures, an arm of brokerage giant JLL (JLL), the Columbus, Ohio-based company’s products are in the Arizona Cardinals’ State Farm Stadium and 26 other professional sports venues, which have implemented its organic cotton tampons and pads from free-vending dispensers in bathrooms.

Demand for Aunt Flow products is driven by clear-bag or no-bag policies, which limit what fans can carry into a stadium. That often forces women to scramble to fit an appropriate amount of period products in a pocket, said Claire Coder, who self-describes as CEO (chief estrogen officer) at Aunt Flow.

In addition, the company believes that as toilet paper is free and many venues are moving toward cashless transactions, women should not be charged 25 cents for a period product. Venues focused on increasing their female fan base are implementing freely accessible Aunt Flow period products in bathrooms, Coder said.

Aside from digitally enhanced access and personal amenities, sports facilities also are using proptech in a wider, more traditional construction aspect.

What’s now generally known as contech — the use of technology in the design and construction of the built world — has been around for decades in sports. Today, one proptech startup is focused on using artificial intelligence (AI) as the next step in such work.

“T2D2 is a platform that uses artificial intelligence – computer vision powered by deep learning – to identify and assess damage and deterioration to building envelopes and structures through drone and ground-based images,” said Jonathan Ehrlich, chief operating officer at Manhattan-based T2D2. “We build digital twins of facilities along with a condition assessment dashboard that is updated on a recurring basis.”

The company’s technology is being used by a growing number of stadiums and arenas, including the Kansas City Royals’ Kauffman Stadium and other MLB, NFL and collegiate venues, said Ehrlich.

By using hundreds of geo-tagged images of damaged conditions and ranking them by severity, Ehrlich said facility managers can get a detailed picture of where to focus preventive maintenance efforts to avoid higher downstream repair costs as well as potential safety issues.

“T2D2’s artificial intelligence allows stadium management to capture a snapshot of their building condition at a given point in time and monitor any potential concerns on an ongoing basis,” he said. “This helps stadiums develop comprehensive maintenance and repair plans, especially when it comes to preserving any corroding concrete or steel.”

Philip Russo can be reached at prusso@commercialobserver.com. 

Two areas of in-person sports attendance that have attracted proptech innovation focus on easing access to sports venues and enhancing amenities, bringing fans light-years beyond the old-school standards of ticket-taking, turnstiles, and a hot dog and a beer.

One proptech startup addressing seamless but secure access to sporting events is Wicket Software, a computer vision technology for ticketing, access control, frictionless payment and credentialing.

Founded in 2020, the Cambridge, Mass.-based company uses facial recognition authentication to replace the physical and digital ticketing process, said Jeff Boehm, chief marketing officer at Wicket.

“At its core, it is a computer vision algorithm that in less than a second can identify or match somebody’s face to a previously submitted selfie or picture of yourself,” said Boehm. “A series of integrations allows us to then identify who that person is in relation to ticketing accounts like Ticketmaster, or credentialing accounts for access control that connect to security gates and other hardware systems used to unlock or open doors, or let people into secure areas. It has very broad applicability.

“Sports and stadiums are by far our biggest market, but we’re also used in other live events in corporate facilities in a variety of industries.”

Wicket’s 30-person workforce is focusing on research and development right now as it continues to build out its technology, said Boehm. However, as early as the COVID pandemic in 2020, the startup snared the NFL’s Cleveland Browns as its first customer, he said.

“People were starting to be allowed back into stadiums in 2020 and [the Browns] sought a solution that could get fans into the stadium while keeping face masks on [and] while minimizing touch and interaction,” Boehm said. “We were able to prove out our technology so that people -— even with face masks on — didn’t have to pull out their phones, didn’t have to touch anything, didn’t have to pass a physical ticket, and could get into the stadium safely.”

Since then, Wicket has added the practice facility and corporate offices of Major League Soccer’s Columbus Crew, the Atlanta Falcons’ Mercedes Benz Stadium, and the New York Mets’ Citi Field to its client roster of about a dozen stadiums, said Boehm.

Wicket’s use is generally free to fans, as the company’s software as a service costs are paid by the teams who are its customers, he said.

“Teams can do whatever they want,” said Boehm. “If they want to charge for this as a premium experience, they could do that. As of now, I haven’t seen any teams charging for it. We’ve actually had a few teams be able to sign up sponsors because of it. A great example is at Mercedes Benz stadium, where fans love using this and it gets them into the stadium faster.

“The stadium actually signed a major partnership with Delta Airlines and called it the Delta Fly-Through Lanes. Other stadiums have done the same thing, including the Cleveland Browns’ stadium.”