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

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Avison's capital markets team in Chicago, led by ErikFoster and Mike Wilson, handled thetransaction. The Avison team also included principal PhilPalmer and debt specialist senior vice presidentDavid Krasnoff. The properties are in Munster,Schererville and Dyer. The seller was Family Care Centersof Indiana, a physicians group.

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

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The Franciscan Alliance, one of the Midwest'slargest Catholic healthcare systems with 13 campuses and annualrevenues of $2.4 billion, has long-term leases on 85% of the spacein the portfolio.

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

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

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

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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.