CHICAGO—Avison Young just helped complete the sale a five-building, 165,000-square-foot medical office building portfolio in Northwest Indiana to New York-based ARC Healthcare Trust II. It was the largest medical office portfolio sale in the Midwest this year, based on the square footage, Avison officials say. Based on the $46 million price, it was also one of the top five medical office portfolio sales in the Midwest during the past five years.

Avison's capital markets team in Chicago, led by Erik Foster and Mike Wilson, handled the transaction. The Avison team also included principal Phil Palmer and debt specialist senior vice president David Krasnoff. The properties are in Munster, Schererville and Dyer. The seller was Family Care Centers of Indiana, a physicians group.

The Affordable Care Act has already begun changing how healthcare providers serve patients, with many putting more emphasis on smaller, easy-to-access specialized facilities, and this set of properties fit the bill and attracted a lot of interest from investors.

The Franciscan Alliance, one of the Midwest's largest Catholic healthcare systems with 13 campuses and annual revenues of $2.4 billion, has long-term leases on 85% of the space in the portfolio.

"This portfolio had wide ranging appeal, as it represents a microcosm of the new healthcare delivery model,” says Wilson, an Avison Young principal. “Investors understand these types of well-located hospital anchored facilities, offering multi-specialty care within communities, are a long term strategy.”

The five buildings in the portfolio include a Franciscan medical mall campus of three buildings at 757—761 45th St. in Munster, IN; and two Franciscan multi-specialty facilities at 2001 US 41 in Schererville, IN and 919 Main St. in Dyer, IN. All of the buildings have long term leases.

"This sale demonstrates the continued strength of the medical office sector due to its stable cash flow and strong long term growth potential,” adds Foster, also an Avison Young principal.