CHICAGO-Ventas Inc. owns healthcare real estateand senior housing facilities in almost every corner of the country. Yet, it didn't have to go far to land one of the one of the most-publicized MOB portfolio offerings of 2013.

Publicly traded Ventas is based in Chicago, where all seven buildings offered in the Advocate Medical Office Portfolio are located. The real estate investment trust and its healthcare real estate division, Lillibridge, closed on the 408,734-square-foot acquisition in recent weeks for a price that has yet to be disclosed nor included in filings with the US Securities and Exchange Commission.

Chris Bodnar of the Healthcare Capital Markets Group of CBRE Group Inc. which marketed the portfolio for the seller, said the sales process was “very competitive.”

“There were 80 confidentiality agreements signed, and we gave about 15 tours and received 10 offers, and it was very close for the top four bidding groups,” Bodnar tells Healthcare Real Estate Insights in an interview. “When the final buyer was chosen, there were some disappointed groups out there.”

While Bodnar did not name the seller nor the buyer, Ventas officials stepped forward for an interview following the closing. The seller, as HREI learned in March, was LaSalle Investment Management.

In acquiring the buildings, Ventas added to its already large Chicago-area portfolio of healthcare real estate. According to Vincent M. Cozzi, managing director of acquisitions for Ventas, the acquisition brings the company's portfolio of owned MOBs in the Chicago market to just under a million square feet. When added to the properties that Ventas and Lillibridge provide third-party property management services for, the REIT's Greater Chicago healthcare real estate portfolio totals about 1.4 million square feet.  

Prior to the acquisition, Ventas had already owned “about a dozen” or so buildings affiliated with or on the campuses of hospitals operated by Advocate Health Care.

“The main reason we were interested in the portfolio is the strategic nature of it for us, as Lillibridge has enjoyed a very strong relationship with Advocate Health here in Chicago for many years,” Cozzi says, adding that most of the Advocate buildings it owns are on hospital campuses. “This was an opportunity to add assets to our local portfolio.”

Unlike some of the other MOB properties that have been put on the sales block in 2013, the Advocate portfolio provides some “value-add” possibilities for Ventas, according to Cozzi.

“The portfolio is 88% leased, and we think that by internalizing the management and leasing teams that we have in place in Chicago, and given the strong relationship that we have with Advocate, we can add value by improving that occupancy,” he says.

The REIT also plans to make some capital improvements in some of the buildings, which range in age from 17 to 41 years. According to CBRE's Bodnar, Advocate Health occupies about 48% of the portfolio, which is home to more than 200 tenants.

John B. Mugford is the 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.