A Chicago-based partnership comprised of an experienced developer, a real estate broker, and a number of physicians affiliated with the Illinois Bone & Joint Institute (IBJI) accumulated a portfolio of medical office buildings throughout the Chicagoland area. The partnership did an outstanding job building this portfolio over the years by acquiring, repositioning and developing these buildings for IBJI and the other medical tenants.
The disposition assignment grew to a 401,428-square-foot, nine property portfolio once our team was engaged. It was 95 percent occupied overall with IBJI anchoring 54 percent of the portfolio. Less than a third of the portfolio had leases expiring within five years and nearly half had at least 10 years of lease term remaining. Properties within the portfolio are strategically located in Chicago’s affluent North Shore markets including Wilmette, Glenview, Lincolnwood, Des Plaines and Morton Grove. Three key assets within the portfolio are the 86,503-square-foot, two-story steel and brick medical facility in Morton Grove; the 60,500-square-foot Des Plaines building; and lastly, the 40,011-square-foot in Chicago off of California Avenue that has excellent viability and signage from the Kennedy Expressway (Interstate 90/94).
Founded in 1990, the renowned Illinois Bone & Joint Institute is one of the oldest orthopedic practice groups in the country. With more than 90 physicians and over 70 physical and occupational therapists in every orthopedic specialty, IBJI offers care for children and adults from some of the most accomplished and respected orthopedists in the country. Many locations offer on-site MRI, CT and X-Ray services. Other tenants within the portfolio include Advocate Health Care, NorthShore University HealthSystem, Resurrection Health Care (Presence Health), Metro Infectious Disease Consultants, and Pain Specialists of Greater Chicago.
IBJI has a strong foothold in the Chicagoland market with 25 total locations. The group’s financial strength and long-term leases allowed us to generate significant interest from private equity, institutions and REITs looking to acquire an extremely institutional-quality investment. Due to our team’s unique platform, specialized marketing campaign, and long-standing relationships with qualified investors, multiple rounds of offers were required. The portfolio was ultimately acquired by a well-qualified, local joint ventured fund targeting healthcare real estate for $131,000,000. This particular buyer appreciated the considerable value in owning and managing such a significant healthcare real investment it its own backyard.
Seller Profile: General Partnership between Developer, Real Estate Tenant Broker, and Practicing Physicians – Chicago, IL
Buyer Profile: Private Capital, Joint Ventured Fund Targeting Healthcare Real Estate – Chicago, IL
Lender Profile: Leading Healthcare Financial Services Company – Chicago, IL