The purchase agreement, still subject to due diligence and final approval by both companies' boards of directors, marks a return to the product type for Great Lakes REIT's management team, if not the company itself. Members of the management team owned and managed medical office buildings from 1987 until 1994.
"Medical office buildings, particularly those attached to hospitals, have incredibly stable tenant bases and offer excellent income growth potential," explains chairman and chief executive officer Dick May. "The management team of Great Lakes REIT has had successful experience with similar properties in the past."
The deal will include a 75-year ground lease on most of the portfolio. The properties reportedly are in Chicago and the suburbs of Barrington, Downers Grove, Hazel Crest and Oak Lawn.
While Great Lakes continues to be attracted to the product type, Advocate officials have decided to sell the buildings and reinvest the proceeds in improvements to its eight acute care and two children's hospitals, including a clinical information system, vice president of facilities and construction Deborah Rohde indicates in a joint statement.
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