440,000 SF of MOB Space Changes Hands

Ten of the medical office buildings that Lillibridge bought are on the Decatur Memorial Hospital campus. Three properties are off-campus, but all are located in the city of Decatur. Five of the MOBs are fully occupied by the hospital and one is leased to the Southern Illinois Family Practice residency program; overall the facilities are 95% occupied.

Lillibridge, which will own and manage the 13 buildings, will offer ownership options to physician-tenants. A remodeling program will be implemented for certain properties during the next 12 months.

Lillibridge chairman and CEO Todd W. Lillibridge notes that the deal's genesis was Decatur Memorial's desire to free some capital to invest in its core healthcare business. The Lillibridge national presence in the healthcare arena includes more than 250 hospitals and healthcare systems across more than 40 states, including 6,000 doctors and hospital tenants, and approximately 10 million square feet of medical property.

Lillibridge's role in the industry includes development as well, with recent projects that include a 60,000-square-foot medical office project at 258 Chickasaw Trail on the campus of Florida Hospital East Orlando. The East Orlando project is called Surgical Medical Plaza and includes a 13,000-square-foot ambulatory surgery center as the anchor tenant in the new three-story foot MOB. The building is scheduled for completion in the fall.

The Grubb & Ellis Healthcare REIT deal involves the acquisition of what is known as the Wisconsin Medical Office Buildings Portfolio, an aggregate of four medical office buildings in the Greater Milwaukee area. The buildings are in Menomonee Falls, Milwaukee, Richfield and Mequon.

Scott D. Peters, chief executive officer and president, Grubb & Ellis Healthcare REIT, describes the deal as "a sale-leaseback transaction with one of the leading providers of healthcare services in Wisconsin." The Grubb & Ellis REIT found the investment apealing for its "attractive credit tenants," according to Peters, who notes that the tenant holds an A credit rating from Fitch Ratings.

The Grubb & Ellis REIT's portfolio totals approximately 5.3 million square feet, and includes 114 medical office buildings, four hospitals, 12 skilled nursing and assisted living facilities and three other office buildings located in 18 states.