Great Lakes REIT Buys Eight Medical Office Buildings

CHICAGO-Great Lakes REIT, a locally based commercial property owner, has expanded its holdings in the Chicago area with the purchase of eight medical office buildings from Advocate Health Care, the largest health-care provider in Illinois, for a total of $59.6 million. The purchase marks a major move into medical office buildings for the REIT, which owns a portfolio of 45 other properties in Chicago and the Midwest.

“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.