General office buildings may still draw side-eye from bank committees, but try prying an outpatient surgical suite or dermatology practice out of the Upper East Side's hospital corridor near Lenox Hill. Healthcare REIT giant Welltower and Joe Simone's Simone Development paid $48.5 million ($882 a square foot) for the 10-story medical and retail building at the corner of Lexington Avenue and East 79th Street. When the deed closed on February 19, 2026, Welltower and Simone Development Companies had officially taken down 1150 Lexington Avenue from Thor 1150 Lex LLC for $48.5 million, with CBRE Healthcare & Capital Markets brokering the trade.
Look past the sticker price and the trade tells a clear story about replacement cost in Manhattan. At $882 a square foot across 55,000 square feet, the closing price marks a 15.5 percent step-up over the $42 million basis recorded in March 2017. In today's five-borough construction market, buying modern or well-maintained brick at $882 a square foot still beats the time and cost of digging a foundation from scratch. Even better for the buyers, the in-place rent roll hands them a verified 6.00 percent going-in cap rate from day one.
Why Capital One Loves Upper East Side Doctor Suites
The real tell in any Manhattan closing sits on the debt side of the ledger. To fund the purchase, Welltower and Simone Development Companies locked in a $31.52 million senior medical office acquisition loan from Capital One Healthcare Finance at 65 percent loan-to-value.
That loan commitment meant the buyers only needed to write a $16.98 million equity check to control a 10-story, 1964-vintage Upper East Side asset. Credit committees aren't stretching to 75 percent leverage anymore, but when a sponsor brings $16.98 million of real cash equity and a basis of $882 a square foot, lenders like Capital One Healthcare Finance are wide open for business.
From Our Desk
When we look at 1150 Lexington Avenue on our placement desk at Light Tower Group, the lesson for New York sponsors comes down to the marriage of entry basis and lender selection. Welltower and Simone Development Companies didn't try to fight the tape—they bought Upper East Side footage at $882 a square foot and paired it with the exact lender bucket built for this business plan. Doctors don't work from home and they never walk away from $400-a-foot plumbing buildouts—which is why Capital One gladly wrote 65 percent leverage on a Lexington Avenue medical asset trading 15 percent above its 2017 price.