CHICAGO—Patriot Equities has just bought the 95,869-square-foot Tenet Healthcare MacNeal Hospital medical office portfolio in suburban Berwyn from Chicago-based Heitman, a real estate investment management firm. According to Cook County property records, the Philadelphia-based Patriot paid $15.3 million for the three buildings, currently leased to Tenet Healthcare's MacNeal Hospital under a long-term lease.
“This is proof-positive of the strength of the demand for strategically located medical properties that are also long-term assets for national hospitals,” Mike Wilson, principal for Avison Young, tells GlobeSt.com. “That really carried the day.”
Wilson and Avison Young principal Erik Foster handled the sale.
Wilson adds that the sale attracted interest from potential investors from across the US. Although there have been a lot of MOB sales this year, between the pension funds, public and private REITs, and other big players, “there is just so much more capital chasing deals than available product. We're seeing that in all of the medical office deals we're doing. It's a feeding frenzy from the buyers' perspective.”
Even though this portfolio is not new construction, it is “right on campus in an urban infill location right off the train station,” Wilson adds. “And whenever anything like that goes on the market it gets a lot of eyes.”
MacNeal Hospital is a 427-bed, fully-accredited teaching hospital with ten primary care centers. It provides health care to communities throughout the near west and southwest suburbs of Chicago. MacNeal was previously owned by Vanguard Health Systems, which recently was purchased by Tenet Healthcare, one of the largest for-profit hospital systems in the US.
The portfolio includes 3340 South Oak Park Ave., a three-story, 42,779-square-foot building next-door to the hospital. Renovated in 2004, it hosts 14 medical practices that provide outpatient services for the hospital. Sub-tenants include the University of Illinois-Chicago Cancer Center and MacNeal Radiation Therapy.
The second building in the portfolio, 3300 South Oak Park Ave, is directly across from the hospital's main entrance. Totaling 5,990-square-feet, the two-story medical office building houses MacNeal Physicians Group.
The third building, 6804 Windsor, is directly across the street from the main hospital building and the Metra commuter rail line stop. The five-story building serves as the headquarters for the IT infrastructure of the hospital, including the high tech data center as well as additional hospital administrative space.
Wilson says it's possible that, with so many dollars chasing after product, more MOBs will come up for sale. “My take on the market is if you're thinking about monetizing your medical property, now is the time.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
