Partnership Sells MOB on Chicago’s North Side
- Mar 25, 2019
HFF has brokered the sale of Lakeshore Medical Center, a 135,093-square-foot, five-story, Class A medical office building on Chicago’s lakefront. The company marketed the MOB on behalf of the seller, a partnership between CarVal Investors and Zeller Realty Group, and also procured the buyer. According to Yardi Matrix data, Stanton Road Capital is the new owner of the asset. The sale price was not disclosed. MBRE Healthcare will manage Lakeshore Medical Center.
Lakeshore Medical Center is at 4700 N. Marine Drive and is attached to the adjacent 236-bed Louis A. Weiss Memorial Hospital. Completed in 2008, the property shares the hospital’s attached 927-stall parking deck. Tenants include Walgreens, Fresenius Medical Care and University Dermatology and Vein Clinic.
Zeller had acquired the property pursuant to a foreclosure in mid-2012. Shortly after that transaction, a $16.9 million variable-rate loan was placed on the property.
The HFF investment advisory team that worked on behalf of the seller included Managing Directors Ben Appel and Evan Kovac, Director Andrew Milne and Associate Matt DiCesare of HFF’s national medical office capital markets team, along with the Chicago team of Senior Managing Director Jeffrey Bramson and Director Bryan Rosenberg. Managing Director Tim Joyce provided debt advisory services.
“Weiss Memorial Hospital, which recently changed owners, serves a very important patient service area on North Chicago”, Appel said, in prepared remarks. “We expect the recent change in ownership, combined with new equity infusion in the MOB, will result in campus growth and better outcomes for the community.”
Strength in the sector
Earlier this year, Pipeline Health of Los Angeles purchased Weiss Hospital in a $70 million deal that also includes West Suburban Medical Center and Westlake Hospital, both in Chicago’s suburbs. The seller of all three facilities was Tenet Healthcare Corp., which has now exited the greater Chicago market entirely.
The MOB sector remains strong and investors continue to be bullish on it, according to a Marcus & Millichap report for the second half of 2018. Nationwide, the sector’s vacancy is still near its 10-year low of 8 percent, as average rents slowly rise. Deliveries appear to be no more than the market can likely absorb and, of course, the demographics of an aging population also support the product type.
Image courtesy of HFF