"Medical office buildings, particularly those attached to hospitals, have incredibly stable tenant bases," said Dick May, chairman and CEO of Great Lakes, adding that the management team of Great Lakes has had successful experience with similar properties in the past. Before Great Lakes was formed, "we owned or managed a number of medical office buildings. The largest medical office property was acquired in 1987, remained 100% leased, and was [later] sold for a profit."

The eight properties, seven of which are subject to 75-year ground leases, total 459,000 sf and range in size from 50,000 sf to 130,000 sf. The buildings are all almost completely occupied, averaging more than 99% occupancy. Seven of the eight buildings are adjacent to hospitals in the Advocate Health Care Group.

Great Lakes projects a first-year cap rate on the acquisition to be about 10.1%, and expects to make about $1.8 million of capital improvements to the properties over the next two years, including common area and HVAC modifications, and roof and parking lot repairs on some of the properties. Money for the purchase came from funds held in trust for 1031 exchanges, plus a $36 million bridge loan from Bank One.