The partnership between Capital Healthcare Properties and HSG Medical completed the acquisition of a freestanding medical/retail property within a key Lombard, Illinois, trade corridor. Immediately upon acquisition, the partnership executed a long-term lease with Duly Health and Care that brings the property from 33% leased to 100% leased.
The financial terms of the acquisition and lease transactions were not disclosed. The asset was sold by a Special Servicer that was represented by Frontline Real Estate Partners.
Capital Healthcare and HSG Medical acquired the 21,070-square-foot building located at 2830 S. Highland Ave. at the highly trafficked intersection of Highland Avenue and Butterfield Road. That location puts it within one of Chicagoland’s strongest, demographically rich submarkets, with proximity to Yorktown Center and Oak Brook Mall.
The Lombard submarket and demographics were very appealing to Duly Health and Care and resulted in the execution of a long-term lease for 14,118 square feet of space. The property exhibits excellent fundamentals for Duly’s growing practice: size, accessibility, immediate availability, and prominent signage. The asset also features several small-shop retail tenants including Potbelly’s restaurant and SimonMed Imaging.
Capital Healthcare and HSG Medical will make significant base building and property upgrades, including a new parking lot, new roof, enhanced front sidewalks, exterior tuckpointing and landscaping. Concurrently, Duly will expand it’s high-quality, affordable multi-specialty services, including dermatology, at this location.
Duly Health and Care is one of Chicagoland’s premier healthcare providers with a dominate position within the DuPage County healthcare landscape. The practice has more than 1,200 primary care and specialty providers across 50+ specialties, 150 locations and serves over 2.5 million patients every year.
The healthcare real estate market continues to experience tremendous growth, with medical outpatient building absorption accelerating in Q4 2024, up 15% year-over-year. Additionally, the retail vacancy rate is also near record lows at 4.1%.
The Property was put under the control of a special servicing agent after the previous owner defaulted on its loan. The special servicer, with no long-term ownership aspirations, put the Property on the market at the beginning of the year. Given the general demand for medtail space within a market area that is demographically rich, Capital Healthcare and HSG Medical aggressively pursued the acquisition opportunity to capture the potential arbitrage of acquiring a distressed asset and leasing it quickly.
The medtail asset offers an ideal location with excellent patient and customer convenience, benefiting from easy access off I-88 and proximity to popular retail amenities including the adjacent Yorktown Center.
