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Wall Street Journal / Biz - Money

Some Press To Get an Address With Just the Right Cachet

Building owners and developers sometimes take extreme measures to be able to find an address with just the right cachet. This was the case when the medical school at Mount Sinai constructed a tower on East 102nd Street a few years ago.
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Josh Barbanel

When the medical school at Mount Sinai constructed a 518-foot tall tower on East 102nd Street a few years ago, it won the right to use another address, 1214 Fifth Ave.Photo: Related Cos.

Building owners and developers sometimes take extreme measures to be able to find an address with just the right cachet.

When the medical school at Mount Sinai constructed a 518-foot tall tower on East 102nd Street a few years ago, it won the right to use another address, 1214 Fifth Ave., for 32 floors of rental apartments, even though the entrance was about 150 feet off the avenue.

In a letter to the Manhattan borough president’s office, which regulates addresses in the borough, Mount Sinai said the Fifth Avenue address would generate higher rents, and help the not-for-profit medical school and hospital center survive threatened federal budget cuts.

“A key indicator to successful residential developments is the address,” wrote Donald Scanlon, chief financial officer in 2011, as the building was nearing completion. “The marketing of a ‘Fifth Avenue’ address will exponentially affect the leasing rate and the overall revenue performance of this development.”

He noted that health-care reform likely would reduce revenue for Mount Sinai of about $450 million during the first 10 years, and that proposed federal spending cuts could reduce more than $80 million in annual revenue.

“This project’s success and cash flow are critical to the success of Mount Sinai and its economic viability,” he said of the rental tower.

The Manhattan borough president’s office approved changing the 4 East 102nd St. address in December 2011 on the condition that a sign be posted on the wall of 1212 Fifth Ave. providing directions to the entrance to 1214 Fifth Ave. on East 102nd Street.

The apartment building was part of a major expansion undertaken by Mount Sinai, including medical offices at the base of the tower, and an adjacent clinical and laboratory complex known as the Leon and Norma Hess Center for Science and Medicine.

Recent monthly asking apartment rents at the building, which is managed by the Related Cos., topped $12,000 for a three-bedroom, $10,065 for a high-floor two bedroom, and $4,600 for a one bedroom.

Since 1214 Fifth Ave. opened Mount Sinai has undergone a huge expansion, as the hospital industry consolidated. It is now known as Mount Sinai Health System, and consists of seven hospitals, a growing outpatient network, and a school of medicine.

In the letter, Mr. Scanlon noted that 20% of the 229 units would be set aside for lower-income housing, and that the building would be non-smoking and be a certified environmentally green building. He also said there was an existing connection to the corner building, a condo at 1212 Fifth Ave. formerly owned by the medical school, which has an easement to use amenities in the new rental tower, including a swimming pool.

In 2012, the medical school was renamed the Icahn School of Medicine, after Carl Icahn, the Wall Street investor who donated $200 million.

Write to Josh Barbanel at josh.barbanel@wsj.com

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