Ziegler Prepares Fund for Medical Properties

CHICAGO-The Ziegler Companies Inc. has closed its fourth and smallest fund yet, with plans to invest the $5.6 million into existing and to-be-developed medical facilities. The money was raised from 87 investors to form Ziegler Healthcare Real Estate Fund IV. John Sweet, managing director of Ziegler’s Healthcare Real Estate Funds, says the company has three years to invest the fund, but that the money will most likely be placed in properties or developments, primarily in the Midwest and Southeast, within the year.

Sweet says medical properties are a sound investment, especially in the current tumultuous economy, because the facilities are occupied by what he sees as a recession-proof industry. “This is as deep a recession as any of us have seen, but to date, healthcare has not been impacted to the extent that other industries have,” Sweet tells GlobeSt.com. “We’re an aging society and are going to demand higher levels of care. Medical as a whole industry is reasonably stable.”

Sweet says third party investment in medical real estate has become increasingly desirable for hospitals and other users. “Historically, hospitals have had about 40% of assets tied up in brick and mortar,” Sweet says. “We knew the hospitals were trying to cut back on the amount of capital they have tied up in buildings, and so selling properties as a means of monetizing and freeing up cash. Also, as healthcare has become more of an outpatient service, there has been the need for more outpatient buildings and for third parties like ourselves to build and own state-of-the-art facilities.”