Buyers snap up real estate occupied by CityMD clinics
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What do three recently sold retail buildings in the New York metropolitan area have in common?
They’re all occupied by CityMD, the chain of walk-in medical clinics in and around the city that became a one-stop shop for COVID-19 testing in the pandemic. The emphasis on healthcare during the past 19 months has turned these companies into attractive tenants for landlords looking to acquire retail real estate.
The properties at Queens’ Ozone Park and Queens Village neighborhoods and another in Mamaroneck on Long Island were sold by Jenel Management to three buyers for a total of $13.35 million.
“Healthcare retailers have traditionally been one of the most resilient, top-performing tenant categories and one of the few to experience accelerated demand during the pandemic,” said James Nelson, head of tristate investment sales at Avison Young.
“Medical is also e-commerce proof,” Nelson said, making these tenants even more desirable as the pandemic accelerated a trend toward online sales. “You can’t purchase those services over Amazon.”
During the first quarter of this year, nearly 40,000 square feet of real estate was leased by healthcare tenants compared with just 14,648 square feet leased in the first quarter of 2019, according to data from CBRE.
CityMD leased those spaces, each spanning 3,000 square feet, within the last year, and they will last for at least 10 years, Nelson added. The company has more than 80 locations across the boroughs and plans to expand further within New York and New Jersey.
Jenel Management purchased the properties, built them out for clinic use and then sold them.
Similarly, life sciences real estate, which includes labs and offices for biotech and medical research companies, has been thriving during the pandemic while other markets such as office, hotels and retail have been depressed.
The life sciences space broke its own records earlier this year, with 331,000 square feet of lab space leased during the first half, more than double the 156,000 square feet leased last year. Two years ago 72,000 square feet of space was leased.