Duke Buys Controversial Loyola MOB

BURR RIDGE, IL-Duke Realty has purchased a three-story medical office building here from Sterling Bay Co., the Burr Ridge Medical Center. The 104,912-square-foot facility is fully occupied by Loyola University Center, a division of Novi, MI-based Trinity Health.

Locally based Blackrock Medical Corp. (not to be confused with the New York City investment firm BlackRock Inc.) had attempted to build the $30 million building, but could not come up with a construction loan. Sterling took over the project as majority partner and gained a $20.5 million loan for the project from TCF Bank, with Blackrock as a minority partner.

The building opened in March 2011, and sources say Sterling gained a $26.9 million first mortgage loan for the property from Bank of America, arranged by NorthMarq Capital, in July. However, Blackrock sued Sterling in October, alleging it is owed money that it invested in the project. Officials from both companies could not be reached for comment.

Keith Konkoli, SVP with Duke’s Midwest healthcare operations, tells GlobeSt.com that his firm knows nothing about the lawsuit. He also says he can’t reveal the purchase price. The purchase raises Duke’s total medical portfolio in Chicago to 570,177 square feet, and more than 3.3 million square feet nationwide, after the company abruptly pulled out of the Chicago office market last year.

“We’re definitely staying in the MOB market here, it’s on a growth trajectory,” Konkoli said. “Healthcare is one of the shining star sectors, and we see a lot of opportunity not only on the acquisition side but also the development side.”