During a Year of Hospital Growth, WestMed Medical Deal Stands Out
Jotham Sederstrom Nov. 15, 2011, 1:37 p.m.
In an effort to resist the staid tradition of naming businesses after the locality in which they operate, Westchester Medical Group, a physician-run, privately owned medical group in Westchester County, rebranded itself in 2009 as WestMed Medical.
But besides distancing itself from an aging brand name, there was another reason behind the repositioning.
“Everything in the economy is shrinking, so we just shrunk our name,” joked Dr. Simeon Schwartz, the company’s founding president.
Last month, WestMed signed a 15-year lease to transform a 28,000-square-foot space at 171 Huguenot Avenue in New Rochelle into a state-of-the-art medical multiuse health care facility. The renovations are expected to be completed by the middle of 2012.
“They have been in a position to expand their service reach,” said Frank Tomasulo, a senior vice president at CBRE who represented WestMed in the deal. “I can’t point to one entity that has taken on more new locations with the amount of square footage than they have over the last few years.”
Budd Wisenberg and William Cuddy Jr., both of CBRE, represented landlord Silwis LLC in the transaction.
Previously, the building served as the headquarters of the international shoemaker Bally North America, which housed a showroom, executive offices and retail space there.
Bally vacated the building in 2003, around the same time the asset was purchased by Siliwis, which then moved Bel-Aqua Pool Supply, a wholesale business the company owns, into a 100,000-square-foot warehouse at the base of the building.
The new space will eventually become a “polyclinic,” which, Dr. Schwartz explained, will offer patients a one-stop medical location for primary, specialty and urgent care. The aim of these polyclinics, he said, is to provide low-cost care in a more convenient setting.
Before it announced its latest clinic last month, WestMed also unveiled a new 84,000-square-foot polyclinic space at Westchester’s Ridge Hill development in Yonkers.
The Yonkers polyclinic is on the second floor of the so-called lifestyle complex, situated in the sprawling, 1.3-million-square-foot development owned by Forest City Ratner Companies. WestMed’s latest site in New Rochelle will provide the region “a facility they don’t have, which I think is going to be extremely popular,” said Dr. Schwartz.
Despite WestMed’s trajectory, however, there is a caveat to the medical group’s story. Even while expanding its so-called polyclinics, the group is in the throes of consolidating much of its medical space outside of Westchester, including a Bronx-based pediatric practice, which is slated to relocate to New Rochelle.
An estimated 30,000 square feet of space will eventually be disposed of in a strategy that targets smaller offices in favor of larger polyclinics. After the company unveiled its plan to move into Westchester’s Ridge Hill, Dr. Schwartz acknowledged in a Real Estate Weekly article that a new Yonkers space would serve as the new home for two medical outposts now operating at 1915 Central Park Avenue and 1254 Park Avenue in Yonkers.
WestMed operates throughout Westchester County and the nearby region, including in White Plains, Purchase, Bronxville and Throgs Neck—and has been expanding at a rapid clip.
In 2010, WestMed opened the Rye Ambulatory Surgery Center, a 14,490-square-foot clinic, on the company’s campus at 1 Theall Road.
When searching for a new location in New Rochelle, WestMed wanted an office space—up to 30,000 square feet—that would make its new polyclinic easily accessible to the company’s growing patient/customer base.
“One of the key elements was to have the proper amount of parking,” said Mr. Tomasulo.
Just blocks from 171 Huguenot is New Roc City, a 1.2-million-square-foot shopping center in New Rochelle’s downtown neighborhood. Also near is a bus route for Westchester’s Bee-Line bus service and the New Rochelle train stop on the Metro-North line.
For landlord Silwis, the challenging job market translated into a challenging office market for the company, said Mr. Wiesenberg.
The space itself was a “fairly large floor plate” that drew interest from other medical companies and from retailers, he added.
With the limited demand in Westchester from traditional service businesses like law firms and financial services firms, attracting a privately owned medical services tenant is ideal to any landlord.
“One of the shining stars has been the growth of the medical practices and the adaptive reuse of former office space into medical space,” added Mr. Wiesenberg.
Other multispecialty medical groups like Mount Kisco Medical Group and Scarsdale Medical Group have increased their presence in the county as budgets and layoffs rise for traditional hospitals like Westchester Medical Center, which is why a private medical client is an attractive one in the county.
“The market is absorbing space at a much lower rate,” said Mr. Tomasulo. “The landlords are clearly realizing this and have known for over the last couple of years that the number of potential users in the market has diminished.”
WestMed will be renovating its new site at 171 Huguenot at a cost of $4 million, said Dr. Schwartz. “The space has been gutted to the beams.”