"Medical office buildings, particularly those attached tohospitals, have incredibly stable tenant bases," said Dick May,chairman and CEO of Great Lakes, adding that the management team ofGreat Lakes has had successful experience with similar propertiesin the past. Before Great Lakes was formed, "we owned or managed anumber of medical office buildings. The largest medical officeproperty was acquired in 1987, remained 100% leased, and was[later] sold for a profit."

The eight properties, seven of which are subject to 75-yearground leases, total 459,000 sf and range in size from 50,000 sf to130,000 sf. The buildings are all almost completely occupied,averaging more than 99% occupancy. Seven of the eight buildings areadjacent to hospitals in the Advocate Health Care Group.

Great Lakes projects a first-year cap rate on the acquisition tobe about 10.1%, and expects to make about $1.8 million of capitalimprovements to the properties over the next two years, includingcommon area and HVAC modifications, and roof and parking lotrepairs on some of the properties. Money for the purchase came fromfunds held in trust for 1031 exchanges, plus a $36 million bridgeloan from Bank One.