July 2014 Chicago, IL | Harrison Street Real Estate Capital LLC snapped up a class A medical-office building just east of Advocate Christ Medical Center in Oak Lawn, delivering a nifty payday for the property’s developer.
A venture of the Chicago-based real estate private-equity firm paid $16.5 million earlier this summer for the Oak Lawn Medical Office Center at 4220 W. 95th St. in its namesake southwestern suburb. Advocate Health Care, the parent of Advocate Christ, and Midwest Orthopaedic Consultants, a doctor’s group, lease the building, with each tenant taking about half of the two-story, 36,500-square-foot property. Both firms are using the building for clinical work, allowing doctors to meet with people in an outpatient setting.
The Bluestone affiliate spent about $2.9 million to acquire the property, a former State Farm insurance facility, in 2011. It landed a $9.1 million construction loan for the office building from Rosemont’s MB Financial Bank N.A. in March 2013 and knocked the insurance center down. “Class A medical office buildings, particularly a two-tenant medical office building located adjacent to a major hospital, are very attractive assets for investors,” Mr. Claes said. “It generated a very handsome return on capital for Bluestone and our equity partners.”
For Harrison Street, the property stood out given its location near Advocate Christ and its tenants, according to Mark Burkemper, a senior vice president at the firm. The Harrison Street venture that bought the property is part of a company fund that focuses on stabilized assets that generate income. “We think (the tenants) will be strong not only now, but over the next 10 years. They’ll continue to be vibrant tenants for us at this location,” Mr. Burkemper said. “This is a very stable, long-term hold for Harrison Street.”