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CHICAGO-The LaSalle Medical Office Fund has two medical office buildings in suburban St. Louis and suburban Richmond, VA under contract, the first purchases for the investment vehicle offered by LaSalle Investment Management, Inc. The 102,000-sf suburban St. Louis property is 99% leased while the 57,000-sf suburban Richmond, VA property is fully leased.

“Well-located medical office buildings have historically been characterized by stable tenancy and predictability of cash flows,” says Steve Bolen, president of LaSalle Medical Office Fund. “As the demand for healthcare services is projected to rise rapidly over the next two decades with the aging US population, we believe that the medical office sector is uniquely positioned to deliver attractive, long-term returns for investors.”

The first phase of funding, totaling $53 million, has closed, allowing the fund to purchase its first two properties. With 60% leverage, the fund will be able to buy $130 million in medical office properties. However, the fund anticipates additional phases of funding that will ultimately allow it to buy $375 million in property, likely to consist of 25 to 35 buildings.

Bolen and senior vice president Bill Maggard have a combined 25 years of experience acquiring and developing medical office facilities, says LaSalle Investment Management CEO Lynn Thurber.

“The aging of the baby-boomer generation, the shift of many procedures to the doctor’s office from the hospital, the relative dearth of capital in the sector, and the trend by hospitals to seek outside investment for new and existing medical office building developments all make the medical office sector very attractive right now,” Maggard says.

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