Six years after the devastating closure of Hahnemann University Hospital, once the primary teaching hospital of Drexel University College of Medicine, a handful of its last vacant properties may finally see new life. For the first time in years, renewed interest has emerged through bankruptcy court sales, with two key bids signaling potential redevelopment.
On July 14, the Philadelphia-based HOW Group offered $5.5 million for Martinelli Park, a former Hahnemann property at 300-304 North Broad Street. The "stalking horse" bid set a minimum purchase price, encouraging further interest from competing buyers. Earlier in May, the Dwight City Group similarly offered $16.25 million for seven of the remaining Hahnemann buildings, including the landmark North and South Towers at Broad and Race Streets.
Gary Jonas, CEO of HOW Group, called the Martinelli Park land "a site we'd be happy to own and in the future develop," adding that "multifamily residential is what our plan would be, once those economics come back in line which they're not right now." A combination of high interest rates, rising material costs and broader economic uncertainty makes this a challenging time to pursue long-term development projects.
Meanwhile, Dwight City Group CEO Judah Angster envisions a transformation of the hospital complex, saying his group plans to "completely change the dynamic of that section of North Broad" by converting the hospital buildings into an attractive mix of residential and hotel uses. While the redevelopment potential is significant, both bids will face challenges brought about by aging infrastructure and complex utility systems still deeply entangled with neighboring buildings.
While these CEOs and other bidders see tremendous opportunity now, healthcare advocates continue to view Hahnemann's closure as a harbinger for the consequences when healthcare is treated purely as an investment. Now, in the wake of a similar disintegration of Crozer Health in Delaware County -- home to the county's only burn center -- concerns are mounting that prioritizing profit over patient care will undermine access to essential medical services for communities across the region.
Founded in 1848, Hahnemann University Hospital long served as a critical safety-net institution for low-income, Black and Hispanic patients in Center City Philadelphia, while also functioning as the primary teaching hospital for Drexel. But in the years leading up to its closure, the hospital's finances had become increasingly unstable. In 2018, Tenet Healthcare -- one of the nation's largest for-profit hospital chains, which had long deferred necessary maintenance at the facility -- sold both Hahnemann and St. Christopher's Hospital for Children for $170 million to American Academic Health System, a private equity-backed company led by California-based investor Joel Freedman.
Initially, Freedman presented ambitious plans to revitalize Hahnemann. He spoke eagerly of opening an outpatient care center and establishing a pediatric clinic to serve low-income families, giving the impression that he was willing to invest in long-term improvements. Those plans quickly unraveled. Freedman failed to deliver on his early vision, and within a year of the 2018 acquisition, Hahnemann was hemorrhaging money. In March 2019, as financial pressures mounted, the hospital announced mass layoffs; by mid-2019, it had filed for bankruptcy and begun winding down operations. At the time, Hahnemann was a 496-bed hospital employing more than 2,500 staff. However, to Freedman, the most valuable part of the deal was the land.
"Everyone and their mother was trying to get that real estate," Peter Kelsen, a partner at Philadelphia law firm Blank Rome, told the New Yorker. Freedman's new corporate entity, Broad Street Healthcare Properties, split off the real estate from the hospital business. This division meant that Hahnemann could go bankrupt, but the land, spread across 19 interconnected buildings on North Broad, remained under Freedman's control.
In July 2019, Senator Bernie Sanders spoke at a rally outside Hahnemann's doors to protest its impending closure -- just months after announcing his campaign to seek the Democratic Party's 2020 presidential nomination.
"If an investment banker like Joel Freedman is able to shut down Hahnemann and make a huge profit by turning this hospital into luxury condos, it will send a signal to every vulture fund on Wall Street that they can do the same thing, in community after community after community," Sanders insisted.
Even after the height of the crisis, Freedman was unapologetic. "I'm working on some things that I think could be meaningful," he told The New Yorker. "I would like to go back to working in health care someday."
Meanwhile, thousands of patients were left scrambling, as were 570 residents and fellows whose training could not continue. It was "the nation's largest-ever displacement of physicians-in-training."
As Philadelphia's remaining health systems stretched to fill the void, the bankruptcy court began untangling the remnants of Hahnemann. During the COVID-19 pandemic, while the city sought to house an overwhelming number of patients, Freedman offered use of the Hahnemann facilities at the rate of $400,000 per month, a figure that drew public ire. The city was ultimately given use of Temple University's Liacouras Center for free.
By his own estimate, Freedman lost at least $10 million on the hospital, but the community lost far more when Hahnemann was never returned to them.
Since then, parts of the hospital's campus have been put into use. In 2021, Iron Stone Real Estate Partners acquired the Bobst Building at 1421 Race Street and redeveloped it into Race Street Labs, a hub of lab suites. The Dwight City Group's current offer signals a larger redevelopment push, but not one centered on health.
In April 2025, the collapse of Crozer Health in Delaware County -- another Drexel-affiliated healthcare system with residency programs -- made it clear that Hahnemann's closure was not an isolated incident. Like Hahnemann, Crozer had been bought by a private equity firm: Prospect Medical Holdings, based in Los Angeles. The firm filed for Chapter 11 bankruptcy in 2023 under the weight of substantial debt. Even after Pennsylvania officials committed millions in March of this year to keep the health system afloat, the company said it had no choice but to dismantle it, overwhelmed by rising costs and unable to secure a buyer.
Prospect had promised $200 million in investments. Instead, they gutted Crozer of its services. By spring 2025, Crozer, the only burn unit in the county, was gone. Over 2,600 people lost their jobs.
"They sold the land... they took over $400 million of profit and gave that to their shareholders," said Pennsylvania Rep. Lisa Borowski. "It was always their intent to close the system and sell off the parts for profit."
A 2024 report by the Private Equity Stakeholder Project found that more than 900 provider locations in Greater Philadelphia are owned by private equity. The group warns of a consistent pattern of risky loans, cost-cutting and abrupt closures.
Following Crozer's closure, Governor Josh Shapiro announced $1 million in funding to ensure that emergency medical services in Delaware County remain functional and responsive to the residents' needs. "Private equity has no place in our health care system. We've seen what happens when corporate raiders like Prospect Medical Holdings prioritize profits over patients -- families lose access to care, health care workers lose their jobs, and communities across the Commonwealth suffer," Shapiro said.
On June 9, a bill introduced by Borowski to give greater state oversight to all hospital sales, acquisitions and mergers was passed in the Pennsylvania House of Representatives. The legislation would provide the Attorney General with review power over all hospital transactions.
Maureen May, President of the Pennsylvania Association of Staff Nurses and Allied Professionals, says that this bill is "too late for Crozer, obviously." Unfortunately, the same can be said for Hahnemann Hospital.
"But in any disaster, you pull together and you try to figure out how to mitigate it in the future," May continued.
Now, the remnants of Hahnemann's campus, relics of a once prominent medical institution, are primed for redevelopment as hotels and apartments. Crozer Health's fate remains uncertain. ChristianaCare, a Delaware health system, has agreed to acquire five of its facilities, but the remaining buildings are up for sale with no prospective plans for usage. In both cases, the closures have left communities with reduced access to critical medical services.
As lawmakers push for stronger oversight of healthcare transactions, the outcome will determine whether future affairs will prioritize patient care or leave communities watching their hospitals follow Hahnemann and Crozer into bankruptcy court and onto the real estate market.