Avison Young‘s Chicago Capital Markets Team led by Erik Foster and Mike Wilson has sold a five-building, 165,000-square-foot medical office building portfolio in Northwest Indiana to ARC Healthcare Trust II based in New York. The sale is the largest medical office portfolio sale in the Midwest this year, based on the square footage. It also is one of the top five medical office portfolio sales in the Midwest during the past five years based on the sales price.
The properties are in Munster, Schererville and Dyer, Indiana. The sales price was $46 million. The seller was Family Care Centers of Indiana, a physicians group.
The S&P “AA” rated Franciscan Alliance, one of the Midwest’s largest Catholic healthcare systems with 13 campuses and annual revenues of $2.4 billion, leases 85 percent of the space in the portfolio long term. Franciscan has made significant recent expansions through acquisitions and development as it maintains a leading position among Indiana healthcare systems. The seller was a private entity.
The Avison Young team also included Principal Phil Palmer and debt specialist Senior Vice President David Krasnoff.
“This portfolio had wide ranging appeal, as it represents a microcosm of the new healthcare delivery model,” said Wilson, an Avison Young Principal. “Investors understand these types of well-located hospital anchored facilities, offering multi-specialty care within communities, are a long term strategy.”
The five buildings in the offering include a Franciscan medical mall campus of three buildings at 757—761 45th Street in Munster, IN; and two Franciscan multi-specialty facilities in at 2001 US 41 in Schererville, IN and 919 Main St. in Dyer, IN. All buildings have long term leases that offer tremendous stability for the buyer.
“This sale demonstrates the continued strength of the medical office sector due to its stable cash flow and strong long term growth potential,” said Foster, an Avison Young principal.
