ELK GROVE VILLAGE, IL-During this time of fierce competition for healthcare real estate, successful investors need ample capital, specialized expertise, an extensive network of contacts – and often a dash of good luck. Stage Equity Partners LLC principals Brian Howard and Russell Brenner say it took all of the above to close a recent medical office building acquisition in suburban Chicago.

The Skokie, IL-based private real estate investment firm acquired the multi-tenant, 52,126 square foot Woodland Square Medical Plaza in Elk Grove Village for $7.2 million. The 9-acre property, a stone's throw from the 387-bed Alexian Brothers Medical Center, is the only building on the campus not controlled by Alexian Brothers Health System.

“To be on campus is a special opportunity,” Howard says, adding that taking advantage of the opportunity required good timing and the right relationships.

The seller – an undisclosed Chicago-area family partnership – developed the four-building complex 20 to 25 years ago. When it decided to sell a couple of years ago, Alexian was an obvious potential buyer. In April 2011, however, Alexian announced plans to become part of Ascension Health, the nation's largest Catholic health system. With that merger in the works, Alexian was not in a position to acquire the Woodland Square assets, Howard says. Ascension, however did close on the three-hospital Alexian system in December 2012.)

Fortunately for Stage Equity Partners, Howard and Brenner knew the owner's representative, Gary Wool of Janko & Wool Real Estate Finance. So they were among a handful of prospective buyers contacted in late 2012.

A select group of about 10 potential investors were made aware of to the opportunity, Howard says, and most of them submitted bids. The principals of Stage Equity Partners met with the seller and the tenants in subsequent weeks, and were selected even though their bid was not the highest. While the price paid (about $138 per square foot) was competitive, Howard says the sellers were more concerned with transferring ownership to an experienced healthcare real estate firm that would maintain their high standards of property management. The transaction closed April 30.

Brenner says Woodland Square was an attractive opportunity for several reasons. Besides being on the campus of an acute care hospital, the MOB complex is anchored by Fresenius North America and Midwest Sports Medicine, is fully leased to 19 “stable” healthcare tenants, and has been consistently almost 100% occupied since it opened. Located on busy Biesterfield Road across from the hospital and just east of Interstate 290, the site enjoys high visibility. There is also plenty of surface parking and the potential for future expansion, although Howard said no such plans are imminent.

Woodland Square was the eighth acquisition for Stage Equity Partners, bringing the total value of its portfolio to about $50 million. The asset was a good fit with the firm's strategy of acquiring “middle market” MOBs in the $5 million to $20 million range, according to Howard. “That's our sweet spot,” he says.

Murray W. Wolf is the Publisher and Founding Editor of Healthcare Real Estate Insights™, the nation's first and only publication totally dedicated to covering news and trends in healthcare real estate development, financing and investment. For more information, please visit www.HREInsights.com