CHICAGO—Patriot Equities has just bought the95,869-square-foot Tenet Healthcare MacNealHospital medical office portfolio in suburban Berwyn fromChicago-based Heitman, a real estate investmentmanagement firm. According to Cook County propertyrecords, the Philadelphia-based Patriot paid $15.3 million for thethree buildings, currently leased to Tenet Healthcare's MacNealHospital under a long-term lease.

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“This is proof-positive of the strength of the demand forstrategically located medical properties that are also long-termassets for national hospitals,” Mike Wilson,principal for Avison Young, tells GlobeSt.com.“That really carried the day.”

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Wilson and Avison Young principal Erik Fosterhandled the sale.

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Wilson adds that the sale attracted interest from potentialinvestors from across the US. Although there have been a lot of MOBsales this year, between the pension funds, public and privateREITs, and other big players, “there is just so much more capitalchasing deals than available product. We're seeing that in all ofthe medical office deals we're doing. It's a feeding frenzy fromthe buyers' perspective.”

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Even though this portfolio is not new construction, it is “righton campus in an urban infill location right off the train station,”Wilson adds. “And whenever anything like that goes on the market itgets a lot of eyes.”

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MacNeal Hospital is a 427-bed, fully-accredited teachinghospital with ten primary care centers. It provides health care tocommunities throughout the near west and southwest suburbs ofChicago. MacNeal was previously owned by Vanguard HealthSystems, which recently was purchased by TenetHealthcare, one of the largest for-profit hospital systemsin the US.

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The portfolio includes 3340 South Oak Park Ave., a three-story,42,779-square-foot building next-door to the hospital. Renovated in2004, it hosts 14 medical practices that provide outpatientservices for the hospital. Sub-tenants include theUniversity of Illinois-Chicago Cancer Center andMacNeal Radiation Therapy.

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The second building in the portfolio, 3300 South Oak Park Ave,is directly across from the hospital's main entrance. Totaling5,990-square-feet, the two-story medical office building housesMacNeal Physicians Group.

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The third building, 6804 Windsor, is directly across the streetfrom the main hospital building and the Metracommuter rail line stop. The five-story building serves as theheadquarters for the IT infrastructure of the hospital, includingthe high tech data center as well as additional hospitaladministrative space.

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Wilson says it's possible that, with so many dollars chasingafter product, more MOBs will come up for sale. “My take on themarket is if you're thinking about monetizing your medicalproperty, 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.